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Adithya Pappala

Launching India's Fi... • 4m

#9TDAYVC- DAY-14 🎯What is Hurdle Rate? 🎯What is Carry Fees? 🎯The preferred returns are also called as “Hurdle Rate” in VC & P.E Funds. It is the threshold return that LP’S should receive prior GP’S receive. In developed markets, The hurdle rate is lower & it’s around 8%. In Indian Market, Hurdle Rates in VC & PE are meant to be higher than the international market according to historical average returns & compared to stock market & therefore it could be around 10-12%. The purpose of having a hurdle rate is set the expectations of Investors as a benchmark rather than the guaranteed returns. Investors always expect to be outpeform the hurdle rates Consistently & therefore build the track record. 🎯Hurdle Returns & Carry fees are both different where Hurdle returns are mostly must expected returns & Carry is if you outperformed your hurdle rate & then carry Fees is applied.Generally The structure is in 2-20% where 2 is Management Fees & 20 is Additional Returns. VC is HARD!

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Adithya Pappala

Launching India's Fi... • 4m

If you are not frequent on Medial, Then Follow here: https://www.linkedin.com/in/adithya-p-070600202/ Access more VC for in- detailed knowledge here: https://substack.com/@9tdayvc If you want to join the 9TDAYVC Community of Founders & Investors. Then DM!!

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Adithya Pappala

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#9TDAYVC-DAY-16 🎯What is High Watermark in VC? 🎯What are Distributions/Waterfall? Apart from hurdle rate, Some consider also “high watermark” This is more common practice in hedge funds. This market denotes the highest value recorded by the f

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#9TDAYVC-DAY-12 🎯Types of Expenses for VC? 🎯What is a Self-Managed Fund? 🎯Organisational Expenses: These are costs for VC Funds which includes such as Incorporation Costs, Statutory Compliance Cost of the Funds, Placement Commissions, Distri

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#9TDAYVC-DAY-12 📌What is Management Fees? 📌What is a Expense for VC? 🎯Management Fees- Management Fees & Expenses contributed to the fund as per investment agreement between fund & Investment Manager.No SEBI Regulations in this Matter. It

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#9TDAYVC-DAY-17 🎯Types of Waterfalls in VC? 🎯What is Clawback? Two types that are “European & American Waterfall”-Under European Waterflow, 100% of all Investment Cash is paid out to Investors on a pro-rata basis & therefore preferred returns

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Adithya Pappala

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#9TDAYVC-DAY-15 What are Additional Returns? What is the Catch-Up Clause? In Developed Markets, The structure is in 2-20% where 2 is Management Fees & 20 is Additional Returns.Additional Returns & 2-20 structure is not ideal in Indian AIF Market

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Is it possible to receive a loan with a 7% interest rate without security?

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The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 6.25%, the first rate cut in nearly five years. What is the repo rate? It’s the rate at which the RBI lends money to commercial banks. A lower repo rate means cheaper loans

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