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Adithya Pappala

Stealth • 6d

#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.Additional Returns could entirely depends on the Manager & his track record of experience. Investment Managers that deliver consistent returns above the preferred returns can expect the Additional Returns. As AIF’S are highly Illiquid in nature, Management Fees can be payable based on the NAV of the fund from time to time.NAV is the valuation of a fund like Assets-liabilties.Example,If a VC had 100 Crores of Assets & Liabilities are valued at 10 Crores then the NAV is 90 Crores.Additional Returns can only be assessed while they exit.The Investment Agreement also specify whether it will have“Catch-Up” Provision or not?The catch up clause is meant to make investment managers extra additional returns of total returns. Shoot the Comments

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Adithya Pappala

Stealth • 6d

Eat more VC Knowledge Pills💊 here: https://substack.com/@9tdayvc

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Adithya Pappala

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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

Stealth • 7d

#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

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Adithya Pappala

Stealth • 5d

#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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Anonymous

Stealth • 4m

✨ ENTREPRENEURS IQ TEST ✨ In the context of venture capital, which term describes a contractual clause that allows investors to protect their investment by requiring the startup to grant them the option to purchase additional shares at a discounted

Drag-Along Rights

Liquidation Preference

Conversion Rights

Anti-Dilution Provision

Votes: 5

1 replies5 likes

Adithya Pappala

Stealth • 13d

#9TDAYVC- DAY-8 🎯Who are Custodians in VC? 🎯What is Net Asset Value? 🎯Custodians:Custodians are for security but also safekeeping the Investments.Custodians needs to give & accept delivery securities of dematerialised Investment Funds whic

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Inactive

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#1 Hedge funds, nam to suna hi hoga HFs are structured as limited partnerships and managed by professional fund managers who use various complex strategies to achieve high returns while minimizing market risks (dhandha hai pr ganda hai!) Key poi

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Adithya Pappala

Stealth • 16d

#9TDAYVC-DAY-5 Who is Sponsor & Investment Manager in VC? 🎯Sponsors: Sponsor means a person who Setup AIF & Invests in. The Application to SEBI is made by the Sponsor.The sponsors should have to satisfy the criteria of Fit & Proper Person as pe

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