Fund size is the total capital committed to a venture fund. It offers a quick clue about which startup stages the firm targets and how large its checks may be. The money is not all transferred at once: LP commitments begin unfunded and are called down as investments are made. section 9.2 section 9.2
When sizing up a VC firm, ask:
- Does the fund size fit the stage and check size your startup needs? section 9.2
- Could the firm run out of capital before the fund ends? Larger firms may use overlapping funds to keep investing across stages. section 9.2
A $250 million fund
Consider a $250 million fund with four partners and five years for initial investments. Assuming roughly $5 million per Series A investment, the firm might make about 25 investments and review around 500 opportunities, rejecting most of them. section 9.2
