What would VentureSouth do?A fair follow-up question on these posts on venture capital fund management fees is: so what does VentureSouth do?You hopefully will not be surprised to learn that we use the step-down approach on our sidecar funds: a percentage of committed...
Originally passed in 2013, The High Growth Small Business Job Creation Act, affectionately known as the South Carolina Angel Tax Credit, gave investors a state income tax credit of up to 35% of the amount they invested in eligible SC-based companies. The tax...
As a final post in this series, here are a few places where you can learn more about sidecar funds. As we said before, information is not easy to come by here, so if you have any better sources we would love to know about them.VentureSouth Angel Fund web pages (links...
As we wrap up this series, a quick post for entrepreneurs to ask: should I care about whether an angel group has a sidecar fund?As an entrepreneur, you should diligence your investors just as they diligence you. This is likely a long journey, and one filled with more...
One of our pet peeves is seeing fundraising efforts ignoring the rules on general solicitations. As a quick primer, most of this type of private capital is raised under the 506(b) exemption to the Securities Act. The details are arcane, but the key is that these funds...
Whenever you are investing, you should do your due diligence. We’ll skip here all the general diligence you should do every time – team, investment thesis, track records, criminal records, etc. – and focus again on the diligence checklist for evaluating sidecars. So...
We’ll skip the reasons for angel investing in general, as hopefully we’ve covered the potential for making money, having fun, and doing good enough already! The advantages of using a sidecar fund for angel investing include:Passive: early stage investing can be hard...
To distill the concepts of the last post into a concrete example: consider the VentureSouth Angel Fund III.It’s a Limited PartnershipIt’s “triggered” to invest when 10 or more VentureSouth members invest, in aggregate, $100,000 or more in an investment. Investments...
After the guesswork of the last post, we’re on firmer ground when discussing how sidecar funds work! First, structurally, they’re usually LLCs or Limited Partnerships, so that investors can pool funds while maintaining the legal liability protections of corporate...
Data on how the number of sidecar funds are not easy to find. Based on some membership data from the Angel Capital Association, my best guess is that around 10% of angel groups that are part of ACA have a sidecar fund. Groups in the ACA tend to be the larger and more...