Estonia Summary
Fund Structure Limited Partner FundCostFormation is generally cheaper than the UK and Luxembourg€13 to register the Limited Partner Fund€12.75 for a notary fee and an additional €18.20 if the notary prepares the draft application plus VAT Timing5-10 business days to register the fund manager60-120 days to register with the EFSA Fund Marketing Fund Managers are subject to AIFMD and NPPR of EstoniaAIFM required to notify regulator via informal letter within 2 weeks of commencing pre-marketing activitiesTax TreatmentLimited Partner Fund is tax transparent In most cases, non-resident investors are not taxed in Estonia and will only have to declare investment income earned from the fund if such income is taxed in EstoniaEstonian Private Equity and Venture Capital Associationhttps://www.estvca.ee/
Estonia Overview
In 2016, Estonia implemented legislation for closed-end PE and VC funds similar to investment schemes in the UK and Luxembourg.…
Author: Decile Group
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.
Alumni of the VC Lab accelerator have raised over $100 MM, and are building innovative new venture funds across the globe. On July 8, 2021, VC Lab hosted a live ‘Meet the Funds’ online event, where 250+ attendees heard directly from the new managers that built their funds in the accelerator. Participating GP panelists included:
Brittany Barreto, Ph.D., Co-Founding General Partner of Coyote Ventures (VC Lab Cohort 3): Coyote Ventures is a $10M Seed-stage venture fund in the US to invest in companies innovating in women’s health and wellness, founded by General Partners who are scientists and industry experts, and supporting founders leveraging our thousand-plus member network and media platform FemTech Focus.
Sidney Nakahodo, Founder & General Partner of Seldor Capital (VC Lab Cohort 2): Seldor Capital is a pre-seed fund based in New York City that invests in startups in the U.S.…
In addition to your fund Thesis, most of the decisions you will make as a new venture fund manager are directly affected by the size of your fund.
Fund size influences investment strategy, team size, and overall impact. There are very different decision criteria between new managers (Fund I) and emerging managers (Fund II or Fund II) when deciding a fund size. Emerging managers can do their next fund at 2x to 5x the size of their previous fund, depending on performance.
This article focuses on fund size criteria for new managers.
What are limitations faced by new managers?
New managers on Fund I have practical limits on investor access. Large institutional investors often bypass Fund I due to additional risk and an unproven track record, leaving new managers to rely on smaller investors.…
In addition to creating your Investment Thesis and venture capital fund size, one of the most important and difficult things for a new venture firm manager to do is to select the focus of the fund.
What is the focus of a venture capital fund?
A venture capital fund will normally focus on three areas: (1) stage, (2) geography, and (3) industry or market. Some examples include:
Seed stage SaaS startups in Vietnam
Angel AgriTech startups in East Africa
Pre-seed HealthTech companies in Germany
As a general rule, the goal is to be as specific as possible with each of the focus areas while also ensuring that there are enough startups and capital for the fund to succeed. So, “Seed” is better than either “Early Stage” or “Pre-seed and Seed”.…
Once you have figured out the fund size and the focus of your venture capital firm, the hardest thing to do is to quantify your unique value proposition.
Or, as we like to call it at VC Lab, the “Secret Sauce”.
What is Secret Sauce for a venture capital fund?
The Secret Sauce of a fund describes why the managers are uniquely qualified to pursue the Thesis. The Secret Sauce provides a matter of fact statement of the competence of the managers with one or two pieces of supporting data. All of the data in the secret sauce must be from companies related to the Thesis, particularly the focus. Examples include:
– “…with a cumulative exit value of over $500 MM in the EdTech sector”
– “…helping three BioTech companies secure over $20 MM in sales each, including five deals with Fortune 500 accounts”
– “…providing startups exposure to our 25 member industry network, which has lead to 12 financings for $65 MM”
What are the top success metrics for a strong Secret Sauce?…