VC 101 - Learn | Carta Classroom

VC 101 | CARTA CLASSROOM

What’s a venture capital fund?

Venture capital can be fascinating yet complex—but there’s help. VC 101 is your guide through the complicated venture capital landscape, making the hard stuff feel easy, giving you a better understanding of VC, and a foundation to help you build your own fund.

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Chapter 1: What's a venture capital fund?

Chapter 2: The venture capital industry

Chapter 3: How VC funds are structured

Chapter 4: Limited partnerships & management companies

Chapter 5, pt. 1: VC regulations

Chapter 5, pt. 2: VC regulations

Chapter 5, pt. 3: VC regulations

Transcript

So if you’re thinking about starting a VC fund, there’s a bunch of foundational details about what funds are and how they work that you’re going to want to know from the very beginning.

My name’s Rita and I’m the head of the venture capital business development team here at CADA, and I also teach Venture Capital Funds at UC Berkeley School of Law. In this first lesson, we’re going to start laying that foundation with some of the most important basics.

Over the next few minutes, we’ll talk about :

So to kick it off, let’s go ahead and zoom right in on that first one. What exactly is a venture capital fund? We’ll start with a simple definition. A fund is a legal entity that pools money in order to invest in assets. The fund then owns those assets until it sells them. Real Basic Fund is just a legal entity that collects a bunch of money to invest that money in a bunch of stuff.

So what’s the difference between a VC fund and a VC firm? A VC firm is the management company that manages the fund. A successful firm may operate several different funds at one time.

Now looking again at that fund, it’s typically formed as a legal entity called a limited partnership. All these third party investors will join the fund and contribute capital to it, and they become limited partners of the fund (LPs for short).

The fund is managed by a general partner (GP), which is a separate legal entity set up to manage the fund.

Typically, VC firms will set up a new entity for each one of their funds, legally separating each fund from the others to limit liabilities of each fund.

Let’s zoom in next on two special words: venture capital. In the next lesson, we’re going to dive into venture capital as an industry and learn a little bit about how it works.

Your guide to launching your firm

Starting a venture capital firm can be complex. That’s why Carta built a playbook to help managers build their funds every step of the way.

Explore course content

7 videos • 43m total length

Chapter 1: What’s a venture capital fund?
Meet the VC fund—learn what it is, how it’s different, and the unique structure that organizes it.

Chapter 2: The venture capital industry
Learn about the five core legal requirements that make a fund a venture capital fund.

Chapter 3: How VC funds are structured
See how management companies, fund entities, and general and limited partners make up a VC fund.

Chapter 4: Limited partnerships & management companies
Understand the limited partnership agreement (LPA) and the big role management companies play in VC.

Chapter 5, pt. 1: VC regulations
Get familiar with the regulatory landscape by knowing its areas of focus, registration requirements, and exemptions.

Chapter 5, pt. 2: VC regulations
We start our journey into the world of exemptions and learn the roles of beneficial owners and accredited investors.

Chapter 5, pt. 3: VC regulations
We end our course by taking a deeper dive into exemptions (including S.E.C. regulation D) and blue sky laws.