Getting Started: Spin-out from Established Fund

Short Description:
- A common way for new venture funds to be established is for people with a track record at one or more established funds to form a new one. Often these are people already known to LPs, with a track record of working together pursuing a strategy and they want to do it better on their own.
Benefits:
- While building the track record and LP relationships, the future fund entrepreneur is getting paid by the established fund.
- There are opportunities for learning from the process and culture of the established firm.
Trade-offs:
- From the perspective of the future GP who wants to start a fund, it can take some time to work at an existing fund with the hope of spinning off later.
- Also,for a given person, the chances of successfully climbing the ladder at an existing VC firm may be less than other ways of starting a fund.
Examples:
- Emergence