This episode is also available as a blog post: https://10leaves.ae/publications/difc/private-venture-capital-funds

Private funds are collective investment schemes, formed by investment professionals (called fund managers), who seek to raise capital to make multiple investments in a specified industry sector or geographic region.

These funds are marketed to qualified or professional investors – mostly High Net Worth Individuals, family offices and institutions.

Private funds are essentially “blind pools”.  Passive qualified investors make commitments to invest a certain amount of capital over time, as per the fund’s commitment schedule, entrusting the fund manager to source, acquire, manage and exit the fund’s investments over a set period of time.

Some VC funds can also be setup to invest on a “deal-by-deal” basis. In these cases, the Fund Manager solicits investments from a pool of potentials, for each specific deal that they source. Multiple investors can invest in multiple deals, and there can be some deals that have no common investors.

Such structures are usually seen in very small VC Funds and can get cumbersome to manage once the number of deals increases.