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The model has a few assumptions:
• The number of investments is assumed to be the remaining capital after the payment of the fees divided by the Average Investment Size
• The capital is assumed to be invested uniformly over the Investment Period
• The investments are assumed to be sold after the Average Hold Period and the proceeds are immediately distributed;
• Operational fees are spread uniformly over the lifetime of the fund
You know the parameters you'd like, your thesis, your unique advantage. If you're ready to set up your fund, Vauban has a digital end-to-end solution to do so. Currently the jurisdictions we offer are UK, Cayman, and Luxembourg.
Our pricing includes legal documents, fund set-up, bank account, on-going administration, investor onboarding, accounting & financial reporting.
The model is based on 2 parameters: the number of investments that you are going to make and the average ticket size per investment.
In a traditional VC model, there is a 5 years investment period following by 5 years harvesting period.
We replicate this type of model with the Syndicate to compare what is comparable, but in a Syndicate, you can continue to invest after 5 years, you don't have to stop investing.
In the fund model, investors will commit a certain amount of money over 10 years. The fund manager then deploys capital to invest between 10 to 100 startups.
Syndicate allows the fund manager to raise capital from investors on a deal-by-deal basis. The fund manager sources startups for investors and they decide whether or not to invest in each deal. For each deal, a new SPV is created.
It all depends on your situation!
Syndicate is great to build your track record as a fund manager. You can do a couple of SPVs and then launch your fund.
Managing a fund is a professional activity and it's a bigger commitment than running a Syndicate. Deal-by-deal investment is something you can do on the side while having a full-time job.
It also depends on your investors, certain investors want to be more involved and invest on a deal-by-deal basis while others just want to subscribe to a fund.