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Effect of fund vs. syndicate structure on LP returns given same basket of underlying investments
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See second tab for return pattern assumptions
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InputsOutputs
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Typical Seed Fund
NOTE: set Fund of Funds fees/carry to 0 if investing direct in seed funds
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Fund Life10years
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Fund of Funds (set to 1% fees/10% carry if used)
Seed Fund
Direct expenses
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⇨⇨⇨⇨⇨⇨⇨⇨⇨⇨⇨⇩
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LP InvestsFund of Funds Fees1.0%GP Fees3.0%Expenses0.2%⇩Actual Invested
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$100-$10-$30-$2⇩$58
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⇩
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⇩Return Multiple
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⇩4
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⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦
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LP ReturnsFund of Funds Carry10%GP Carry30%Returns
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$180-$9-$43$232
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FeesCarryTotal
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Fund of Funds$10$9$19
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GP / Syndicate Lead
$30$43$73
NOTE: GP pays back office, etc., so earns less after expenses
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Total$40$52$92
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AngelList Syndicate
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Fund Life10years
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Fund of Funds (set to 1% fees/10% carry if used)
Syndicate
Direct Expenses
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⇨⇨⇨⇨⇨⇨⇨⇨⇨⇨⇨⇩
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LP InvestsFund of Funds Fees1.0%
Synd. Lead Fees
0.0%Expenses0.3%⇩Actual Invested
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$100-$10$0-$3⇩$87
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⇩
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⇩Return Multiple
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⇩4
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⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦⇦
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LP ReturnsFund of Funds Carry0%Lead + AL Carry25%
(Est. equiv. of 20% deal-by-deal carry)
Returns
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$285$0-$63$348
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FeesCarryTotal
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Fund of Funds$10$0$10
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GP / Syndicate Lead
$0$47$47
NOTE: Syndicate leads bear negligible expenses since AL does back office
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AngelList$0$16$16
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Total$10$63$73
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