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The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch cover image

20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

NOTE

Challenges in Valuing Investments and Misalignments in LP Incentive Mechanisms

In this chapter, the speakers discuss the challenges faced by LPs (Limited Partners) in valuing investments and the disparities in numbers provided by GPs (General Partners). They also explore how LPs are incentivized based on the performance of their portfolio and how this may not align with their personal paycheck. The conversation delves into the historical context of incentive mechanisms in venture capital and how they may be outdated in the current market. Additionally, the speakers touch on the misalignments caused by fund size and the importance of considering management fees and GP commitments on a case-by-case basis.

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