INSIGHTS

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Venture Deal Basics

NVCA Model Deal Terms: Overview

Safes: Pro Rata Rights and Anti-Dilution

The Rule of Three in Venture Term Sheets

Graduation Rates Of Seed-to-A Startups

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"Graduation rates from Seed to Series A have fallen," illustrates the declining success rates of seed-stage startups progressing to Series A funding from Q1 2018 to Q2 2022 Key features of the chart: • Time frame: Q1 2018 to Q2 2022 • Measurement: The chart shows the cumulative percentage of startups that have "graduated" to Series A funding over time, measured quarterly up to 12 quarters after their seed round Color coding: The percentages are color-coded, with light blue representing under 10%, dark blue: 10-24%; red: 25%+ • Two-year mark: The chart highlights the 8th quarter (2-year mark) as a significant milestone •Trend: There's a clear downward trend in graduation rates starting in 2021 Key insights: • Early cohorts (2018-2020) show higher success rates, often reaching 30-40%+ graduation rates by the 2-year mark • The 2020 Q2 and Q3 cohorts show peak performance, with graduation rates exceeding 40% after 2 years • Sharp decline in 2022

Source: Peter J. Walker (Carta), 🔗https://x.com/PeterJ_Walker/status/1825241890704511076

Cap Tables

Bridge Round Financings

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Frequency of Bridge Rounds Declined in Q2 2024 for Post-Seed Rounds

Source: Carta, State of the Private Markets (Q2 2024)

Down-Round Activity




Pay-to-Play Provisions



409A Valuation Discounts

Valuation and Round Dynamics (q1 2024)

The Big Book of Venture Capital - Q1 2024

Source: Rohit Yadav, 🔗The Big Book of Venture Capital (Q1 2024)

The Big Book of Venture Capital - Q2 2024

Source: Rohit Yadav, 🔗The Big Book of Venture Capital (Q2 2024)

The Big Book of Venture Capital - Q3 2024

Source: Rohit Yadav, 🔗The Big Book of Venture Capital (Q3 2024)

Key Differences Between Common Stock and Preferred Stock for Secondaries

NVCA: Adoption of Model Forms

NVCA: The Compounding Effects Of Forms

The Secret YC Safe

Death of the SAFE—Safe Preferred Only

Closing Checklists for VC Deals

Venture Capital Fund Formation

Fund Formation Guide

Launching a Fund Graphic

Management Company and GP Structuring

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VC Fund Structure: Venture Capital Firm, Fund Managers, Limited Partners, Management Company, GP, LPs, Ownership and related party structures

Source: Law of VC, adapted from NVCA, 🔗#27 Episode - Checklist for VC Fund Formation ✅

Cash Needs to Launch a VC Fund (GP Commit)

Fund Liquidity

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Continuation Fund Structure: Legacy Fund transfer to Continuation Fund with New LPs

Source: University of Chicago Booth, Stigler Center, 🔗The Rise of Private Equity Continuation Funds (Nili, Kastiel)

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Figure 1: Continuation Funds - This chart illustrates the structure of a Continuation Fund transaction. In this setup, the General Partner (GP) creates a new continuation fund to buy assets from the Legacy Fund, where existing LPs have two choices: 1) Cashing-out LPs: These LPs choose to sell their interests, receiving their share of the purchase price from the continuation fund. 2) Rolling LPs: These LPs roll over their interests from the legacy fund into the continuation fund, maintaining exposure to the assets. Meanwhile, New LPs contribute fresh capital to the continuation fund by purchasing fund interests, which are used to buy the assets from the legacy fund. The target assets are transferred from the legacy fund to the continuation fund, and the purchase price flows back to the legacy fund to pay out cashing-out LPs. This structure provides liquidity for LPs seeking an exit while allowing GPs to continue managing the assets, with the option for other LPs to remain invested.

Structuring VC Funds (UK)

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A diagram of VC Fund Structuring (UK funds only)

Source: Carmen Alfonso Rico, 🔗https://sifted.eu/articles/how-to-set-up-vc-fund-structure

Checklist for Emerging Fund Managers

Key Takeaways from the Big Book of VC

Venture Capital Performance

VC Fund Waterfalls

QSBS

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How to qualify for QSBS -

Emerging Fund Due Diligence: A Practical Guide for Fund of Funds

What Do Venture Capitalists Look For?

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A diagram of VC Fund Structuring for UK funds

Source: Aumni, 🔗 Top 10 most requested metrics by series

Regulatory Compliance

Corporate Transparency Act (CTA)

VC Regulations

Integration Doctrine for VC Advisers

The Seven Deadly Fund Marketing Rules

New VC Law Proposed

VC Regulatory Playbook

State Adviser Rules: Florida

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Source: Law of VC (Roam Research), 🔗https://roamresearch.com/#/app/Funds/page/11-05-2024

On February 7th, 2024, Carta posted the VC regulatory playbook:

VC regulatory playbook published by Carta
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