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...
Sidecar funds
Sidecar funds primer: The entrepreneurs perspective
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...
Sidecar funds primer: What else should we be aware of?
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...
Sidecar funds primer: What should I evaluate in my sidecar fund diligence?
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...
Sidecar funds primer: Why might someone invest in a sidecar?
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...

Sidecar funds primer: How do sidecars work in practice?
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...
Sidecar funds primer: How do sidecars work?
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...

Sidecar funds primer: How many are there?
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...

Sidecar funds primer: What are sidecar funds?
A sidecar fund is a pooled investment vehicle that makes investments by “riding alongside” another investor. A pooled investment vehicle means an investor puts their money into a common pool with other people. Riding alongside means the pool invests in conjunction...

Sidecar funds primer: Learning about sidecars
A few weeks ago, someone asked us where they could find good educational materials about angel group sidecar funds. Our answer was: So we got to work, and last week we and Venture Carolina held a lunch and learn about sidecar funds. A big virtual crowd joined us –...