Chapter 7
Running the Fund
Chapters 1-6 follow the deal. This one follows the money around it: how committed capital gets called and returned, how the portfolio gets marked, what LPs receive every quarter, and the rules a fund operates under. It's the core of the fund operations seat, and the part of the partner job nobody sees from the analyst desk. Analysts can skim it. Anyone heading toward ops or a GP seat should read it properly.
Capital Calls, Distributions & the Waterfall
A fund doesn't receive its money on day one. LPs commit it, and the fund draws it down over years through capital calls. When exits happen, money goes back out through a distribution waterfall that decides, in order, who gets paid what. Everything a fund's back office does rests on this plumbing: capital accounts, notices, tax slips, the audit. This module covers committed versus called capital, how a call works, European and American waterfalls, the GP catch-up, and clawback. By the end you should be able to read a waterfall clause in an LPA and say who gets the next dollar.
6 resources
Marking the Portfolio
Every quarter a fund has to say what its companies are worth. There's no market price, so someone has to decide, and those marks drive the fund's reported returns long before any exit. That makes them central to whether LPs back the next fund. This module covers what fair value means under the accounting rules, why the last round's price is a starting point rather than an answer, how share class changes the value of the same company, the common methods, and the process that makes a mark defensible to an auditor. You won't be building an option-pricing model after this, but you'll know what to ask the person who does.
4 resources
LP Reporting & Fund Performance
LPs don't see your portfolio the way you do. They see a quarterly package: capital account statements, a schedule of investments, financial statements, a letter and a handful of performance numbers. Once a year they get audited financials and tax slips. That package is the product a fund ops team ships, and it's what LPs use to decide on the next fund. This module covers what goes in it, how IRR, TVPI, DPI and RVPI are calculated and why they disagree, what the ILPA templates standardise, and how to benchmark a fund against its vintage.
5 resources
The Rules a Fund Operates Under
A venture fund is a securities issuer, and its manager advises it. Both facts bring regulation, and the rules differ sharply between Canada and the US. Most venture managers operate under exemptions rather than full registration, but exemptions come with conditions, filings and deadlines. This module is a map, not legal advice: how raising a fund works under securities law, when a Canadian manager has to register under NI 31-103, what the US exempt reporting adviser regime requires, and the compliance calendar that follows. Every fund needs counsel for this. The goal is to know what to ask them.
4 resources