The Updated Cornerstone LPA further improves on key terms to give fund managers more flexibility. VC Lab has additionally consolidated essential sections while enhancing the overall readability of the document.
Key Updates:
KEY ECONOMIC TERMS
No major updates have been made to previous key definitions in this section.
Newly added definitions are:
Fund Thesis
Sector
Stage
Geography
Management Fee
As requested by fund managers, we’ve added a flexible ‘cascading management fee structure’ while improving readability
ARTICLE 2 – CAPITAL ACCOUNTS AND PARTNERS
2.2.2a – Capital Contributions
Removed post investment capital contribution limitations giving fund managers the option and flexibility to call capital post-investment period
2.3 – Default
Updated to enable GPs to take more actions regarding defaulting LPs
2.5 – Additional Limited Partners
Updated to enable GPs to bring in additional LPs after the close
Requiring said LPs to be on the same capital call schedules as other LPs and partners
ARTICLE 4 – OPERATIONS
4.1 – Investment Objectives
Improved follow-on investment language
4.3 – Authority of GP; Key Individuals; Conflicts of Interest; Advisory Committee
Tightened up conflicts of interest language
Flexibility to follow on investments with Special Purpose Vehicles (SPV)
4.92 – Management Fee
Update to payable management fees
ARTICLE 7 – SUBSCRIPTION
Added new Cornerstone subscription section
Conjoined from multiple sections to clearly define here
The Decile Group develops industry-leading offerings to transform venture capital into an ethical force for good in the world, including VC Lab, Decile Hub, Decile Partners and Decile Capital.
The PACT - the letter of intent for LPs A PACT (“Pledge Agreement for Capital Transaction”) is a non-binding letter of intent signed by a qualified investor to indicate their desire to invest a specific amount of money into a startup…
