How can the LPs operate in the Lilypads Venture Funds?

Lilypads Venture Funds are highly beneficial and offer more features than a traditional fund. 

 

Having flexible terms, an LVF allows the LPs to increase or decrease their commitment to the fund.

 

The LPs can auto-renew their quarterly subscriptions and access the investments that are made in the quarter to which they are subscribed.

 

When an LP subscribes to LVF, they commit to contributing each quarter. Therefore as mentioned previously, the LPs can modify the subscription or cancel it after they have achieved the minimum number of capital contributions. 

 

Due to their subscription, the LPs can make capital contributions to the next quarterly fund. Hence, new LPs in a Lilypads Venture Fund don’t come into existing deals.

Who benefits the most from Lilypads Venture Funds?

LVF benefits both new and experienced Sponsors(GPs). The fund managers who have a consistent deal flow access to capital and make more than three investments per quarter, will benefit the most from LVF. However, every LVF manager should be an Accredited investor.

How can I set up a Lilypads Venture Fund?

To set up an LVF, you need to create a Business Network Page and fill out the required form whereby you are required to provide some basic information regarding yourself, your investing records, and the particular LP interest that you have. After you have filled out the form the Lilypads team will review it and determine whether you are eligible for the pilot list of funds. If you qualify for setting up an LVF someone from the Lilypads team will reach out to you for the next steps

How can I qualify for setting up a Lilypads Venture Fund?

To qualify for setting up an LVF you must either be an accredited investor yourself or use an accredited entity as Sponsor (GP). In a nutshell, you are eligible to Lead an LVF if you follow the parameters set by the SEC. 

 

Although not mandatory, some experience in real estate and having an extended network enable you to to be able to lead an LVF. Besides, a track record in investments is also considered to be a bonus qualification to lead an LVF.

How long does it take to set up a Lilypads Venture Fund?

Depending on the specifications and customizations, the launching time of a LilypadS Venture Fund can range from a few days to a few weeks. Throughout this period your account manager will work alongside you to ensure that your LVF is live as fast as you need it to be.

What is the pricing for a Lilypads Venture Fund?
  • Admin fee: 0.12% annual of AUM
  • No carry on your LPs
  • 5% carry on Lilypads’ LPs
How does Lilypads collect management fees?

Lilypads collects the management fees upfront at the beginning of each quarterly fund. However they are held as collateral and paid to a GP gradually over time and its terms would be governed by the Fund administration.

How does closing capital work?

In the Lilypads Venture Funds, the fund managers can continue to close capital into their current quarterly fund until the end of the second month of that quarter. Therefore the Limited Partner who subscribes in the last month of any quarter will automatically be subscribed to the next quarterly fund.

 

On the first day of each calendar quarter like 1st days of January, July, and October, an initial closing is automatically conducted. If a fund launches in the mid-quarter, its managers can choose to close capital on any first day. Furthermore, the managers can consult with their Venture Capital Associate and notify them of the date by which they wish to formally close the extra contributed capital into their fund.



What happens to the uninvested capital at the end of the quarter?

If a fund does not redistribute all of its capital in one quarter, the balance generally rolls over automatically into the next quarter’s fund. It is considered an additional capital contribution. However if an LP chooses to cancel the subscription, any invested capital is returned to the LP who would not receive any proportion of the admin or management fee back.

How do the GPs benefit from the Lilypads Venture Funds?

GPs and their LPs can benefit from LVF in numerous ways. Some of the benefits include:

 

  1. Fund and account management

 

  • Bank accounts and Special Purpose Vehicles
  • Legal documentation and regulatory filings
  • Fund pages and marketing documents
  • Tax reporting

 

  1. Investor management Dashboards

 

  • Fund distributions
  • Track subscription status and its auto-renewal
  • Fund subscription management
  • Minimum term commitments

 

  1. Portfolio management technology

 

  • Estimation of Portfolio valuations
  • Tracking of investments and Sponsor (GPs)
  • Calculations of Internal Rate of Return (IRR) and other performance metrics



Will the Lilypads Venture Fund compensate the lead for their expenses incurred for acquiring LPs/deals?

The Lilypads Venture Fund documents will contain elaborate information regarding which expenses are eligible for being paid off by the fund. Generally, the LVF does not reimburse the Lead for acquiring Limited Partners or sourcing deals. However, the Lead will be reimbursed from the management fee itself.

What is the maximum limit of investors in a Lilypads Venture Fund?

You can accept up to 99 accredited Investors into your Lilypads Venture Fund and up to 1,999 Qualified Purchasers.

What is the cost of running a Lilypads Venture Fund?
  • Admin fee: 0.12% annual of AUM
  • No carry on your LPs
  • 5% carry on Lilypads’ LPs
Where can I see how much I’ve made in management fees?

You can see how much you have made in management fees in the Capital breakdown of the Investing page.

What is the structure of the management fees in the Lilypads Venture Funds?

Each fund will pay the Fund manager an accepted management fee. Generally, management fees will accumulate over the first ten years of each fund’s duration and must be paid in advance over four years. Similar to a traditional fund, in an LVF, the GPs can defer fees on an LP-by-LP basis.

How are admin fees charged in a Lilypads Venture Fund?

The administrative fee is charged as a percentage of the entire capital commitment to a quarterly fund. Therefore the administrative fees exclude any proportion of rollover capital contributions from past quarters. Similar to the management fees the administrative fees are collected upfront and a designated account is set up for paying such fees for the fund.

What information do my LPs see regarding my fund?

Your LPs can view subscription terms, funding status, FAQs, and other associated charges about your fund on the fund page.

This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.

Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.