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...
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...
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 –...