Decile Launch
VC Lab offers a fund formation service to select participants, called Decile Launch. The service provides all of the fund formation tasks, including legal, back office and a virtual associate to help with closing, for a fixed fee. Currently, Decile Launch works for U.S. domiciled funds, and efforts are underway to localize the service in the Caymans, Canada, Netherlands and Singapore.
Decile Launch is currently by invitation only as capacity is limited by the high quality of service provided.
Offering
VC Lab has developed a series of lightweight template fund governance agreements. A team of lawyers, back office professionals and venture capitalists have collaborated to make the agreements easy-to-use and easy to follow, which reduces the cost and the time required for fund formation. The agreements have been successfully used to form a number of previous alumni funds that have closed on capital with limited partners around the world.
The agreements below are localized for the United States, but they are designed to be easily localized for other jurisdictions. They are free to use, and we encourage everyone to read the agreements and provide feedback using the “Link for Commentary” below.
Benefits
There are a number of benefits to the VC Lab Fund Formation Templates, notably:
Short
Each of the agreements have been painstakingly edited to remove any redundant or excessive language, which means that these agreements are one third or less the length of traditional fund governance documents.
Readable
The team drafting the agreements worked to re-write complex legal concepts in plain english wherever possible and placed the location-specific tax language in an addendum to make the agreements easier to localize in other jurisdictions.
Clear
The economic terms and key variables are all placed in the front of every agreement to make the terms clear to any signatory or reader, eliminating the need to browse through hundreds of pages to find key terms.
Simple
The agreements use an ownership model to manage the control dynamic of the different vehicles, which simplifies the drafting and reduces the needs for service agreements between the entities.
Fair
The agreements factor in various control dynamics and offer intelligent and lightweight checks and balances to ensure that all parties are treated fairly.
Enduring
The agreements are designed to support changes in control and other eventualities that happen when building organizations that exist for dozens of years.
Ethical
The agreements have high ethical standards and have a voluntary affirmation for signatories to agree to the Mensarius Oath.
Fund Diagram
An enduring venture capital firm traditionally has three entities for a fund. First, there is the fund itself, which is typically a limited partnership. Then, above that, is the general partner, which contains the managers, partners and venture partners for one or more funds. Above that is the management company, which is owned by the founders, or managing partners. The management company controls the brand and provides management services to the fund. Employees work for the management company.
Any set of fund formation agreements and documents will have a “Fund Diagram” that explains the control dynamics and money flows. Below is the Fund Diagram for the VC Lab Fund Formation Templates.
Agreements
VC Lab has developed three primary agreements in the Fund Formation Templates, as well as some support agreements. The three main agreements are available for your review and commentary below.
Cornerstone – Limited Partner Agreement
Link for Commentary – vcl.to/xq8
Stewardship – General Partner Agreement
Link for Commentary –vcl.to/cch