Conflicts of Interest

In setting up a VC fund, beware of conflicts of interest.

Funds associated with other groups such as universities, accelerators, or incubators may find a conflict with other funding activities in that group.

These groups are often focused on helping the startup launch.

This leads to funding startups that may not qualify for funding.

Make sure the fund is independent from the group and makes decisions based on the investors’ best interest.

Set up the fund separate from the group with different leadership.

The fund could have first rights for any deals related to the group but is not obligated to invest.

Define the relationship between the group in the fund’s documents, so it’s clear to the group, the fund managers, and the Limited Partners.

Also, review the fund manager’s other commitments and relationships to make sure they are free and clear of other incentives.

If the fund manager runs other businesses, vet those businesses for any conflicts of interest as well. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

---

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.

Copyright (c) 2024, Hall Martin and investorconnect.org. All rights reserved.

Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.