Zero Fund-VC|Investi... • 7m
#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 fund Corpous in the past.If this level is prescribed, Then the fund manager will get additional Returns only after it crossed that value or mark. Then the additional returns will be as follows: In first year, If the fund value is upto 120 Crore then returns will be nil as it is equal to hurdle rate. If the fund value exceeds let’s say 145 crores then the additional return is 25 Crores. In a fund, This pays annual incentives to the fund managers. Distributions:This Indicates how the proceeds of the Funds will be returned to the Investors. This includes proportion, Priority, Management Fees & additional returns etc. Therefore it is very much Essential to understand the distribution terms of the fund carefully from the PPM before investing.
Zero Fund-VC|Investi... • 7m
#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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#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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#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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#9TDAYVC- DAY10 🎯What is meant by Blind Pool? 🎯What is Draw Down? 🎯Capital Commitments: Capital Commitments under less than 1 Crore is not acceptable under AIF.Employees or Directors of the AIF should Invest a minimum of 25 lakhs. 20 Crores
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"Did you know? Earth's annual GDP is 900 Lakh Crores ($10.7 trillion) & valuation is 2.8 Lakh Lakh Crores($332 trillion) You may ask,why does it matter to me? As an early-stage entrepreneur, remember: "The larger the sector,The higher the Impact, T
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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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