Startup Funding Espresso -- Venture Fund Defaults
Venture Fund Defaults\xa0 Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In a market recession, it\u2019s often the case that limited partners - called LPs - are unable to fulfill their capital commitments to venture funds.\xa0 For venture funds encountering this issue, the first step is to open a dialog with the LPs about the capital needs and the LP\u2019s ability to provide the funds. Explore potential options such as lines of credit both for the fund and the LP. Fund managers should discuss with the LPs about the strategy tradeoffs between investing in new startups and supporting existing investments. Fund managers should reconsider the valuation methods as the market environment has changed.\xa0 Fund managers could also approach the LPs about extending the fund timelines given the new market situation.\xa0 For those still raising funds, consider updating existing offering documents to adjust the financial projections and risks.\xa0 Fund managers should also consider the pace of new investments in light of committed follow-on investments.\xa0 Finally, fund managers should review any potential clawback situations and adjust accordingly. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .