How do I receive tax documents?

Investors in Lilypads receive a Schedule K-1 tax document. This is concerning each quarterly fund to which they are subscribed. 

 

Furthermore, Lilypads combines every relevant K-1s into a single documentation package which we send out to every individual investor. 

What happens if a Lead or GP reinvest their management fee?

The GPs have the option to drop the receipt of management fees which the fund must pay. In exchange, the GP can get an increased allocation of the fund’s future profits. 

 

Therefore when a GP reinvests their management fee, it implies that they are re-investing a particular proportion of their management fee back into the fund.

If an LP qualifies for a management fee waiver or a platform fee waiver, why are they still required to pay the full amount up-front?

A management fee waiver or platform fee waiver either entirely or partially decreases the LP’s fees for a particular quarterly fund. Hence, when an LP’s fees are waived, the LP’s contribution towards the management or platform fees will be regarded as investable capital.

Can LPs each have different commitment terms?

A fund manager has the discretion to set a minimum term commitment on an LP-by-LP basis. For instance, some LPs can be on a single quarter minimum commitment schedule. While others can be on an 8-quarter minimum commitment schedule.

How do management fees and expenses work?

In Lilypads Venture Funds, new quarterly funds are created in each quarter to invest in various deals that are sourced during any particular quarter. 

 

When an LP subscribes to these funds, they contribute capital to each quarterly fund. Moreover, the LPs are eligible to modify or cancel their subscription before the subsequent quarterly fund begins and after they meet the number of quarterly subscriptions, they had initially committed to.

 

An LP’s subscription into a quarterly fund also allows any outstanding investable capital at the end of the quarterly fund’s deployment period to automatically roll over into a subsequent quarterly fund. As a result, the LP will be eligible for receiving an associated contribution to the next quarterly fund together with the subscribed and contributed amount into the subsequent quarterly fund.

What happens when an LP wires funds post-deadline?

 

There are usually set dates by which an LP can alter their subscriptions or initiate their wire transfers. In case an LP fails to send their committed funds by the set deadline, their investment amount will be delayed to the next quarter.

Are the LPs aware of the companies that the fund invests in?

It is entirely the discretion of the fund’s Lead or GP to decide whether or not they will update the LPs about the fund’s investment and its Portfolio vehicles.

Will the LP’s percentage ownership of the quarterly funds be constant?

No. An LP’s pro-rata share of funds and ownership percentage will not remain constant for every quarterly fund. It is subjected to change based on any modifications in the subscription amount or the subscription made by other LPs.

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.