References:

• book: Secrets of Sand Hill Road

Understanding how a VC fund operates is pretty straightforward once you know where they get their money and how they earn it.

Takeaways:

• investing in an average Venture Capitalists fund might lock up your money for years with returns that could lag behind major indexes like the Nasdaq or S&P 500.
• Only a few funds generate the majority of returns. Same patterns as for the few startups that can deliver massive returns and significantly return the fund to the Limited Partners.

VC Lifecycle

1. Funds raise money from Limited Partners
2. After about 10-12 years, Venture Capitalists are expected to deliver returns to their Limited Partners
3. Successful funds raise more money and repeat the process

Anatomy

At the core

Limited Partners and General Partners are at the core of every venture capital firm and act as the two primary types of investors.

The legal structure is usually limited partnership (US at least) (made up ate least one GP and one LP)

Lecture continue: https://www.goingvc.com/post/the-anatomy-of-a-venture-capital-firm-understanding-structure-and-operations#:~:text=the%20United%20States.-,General%20Partners,-GPs%20manage%20the