Origins - Inside Venture Capital, Hosted by a GP and an LP Franchise Funds: Metrics To Be Extraordinary with Jessica Archibald
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Jan 8, 2025 Jessica Archibald, a GP at Top Tier Capital Partners and expert in fund management, joins to discuss the nuances of franchise funds. She highlights the significance of reliable DPI metrics and the value of consistent returns over flashy numbers. Archibald delves into the critical aspects of succession planning and how it affects fund stability and franchise status. The conversation also covers communication dynamics between fund managers and LPs, emphasizing trust-building for long-term success.
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Franchise Fund Definition
- Franchise funds are primarily defined by their effortless fundraising abilities.
- This stems from strong LP relationships and consistent performance, creating high demand.
Fund Evaluation Metrics
- Top Tier Capital Partners uses an A-F grading system to assess funds across various metrics.
- These metrics encompass fundraising, distributions, valuations, team stability, and succession planning.
Franchise Fund Age
- Reaching franchise status likely requires a firm to be over a decade old due to the time it takes to demonstrate performance and DPI.
- Current market conditions, with fewer exits, reinforce reliance on established funds with proven track records.