Fact
AngelList and Carta turned anyone into a fund manager
Brianne argues the forcing function behind the solo-capitalist boom is platforms like AngelList and Carta that handle back-office, legal and LP connections — but she also spent two years blogging and tweeting to build the track record needed to raise outside money.
“AngelList and Carta have made this incredibly easy. I think the forcing function in venture, which has caused, you know, the ability for anyone to become a VC or to raise their own fund, is these platforms, which basically connect you with investors. They make it really easy to manage like your back office and, you know, you don't have to deal with lawyers and all that stuff.”
Steal thisSpend 1-2 years publicly building a track record (blog/tweet your investing thesis) before you try to raise a fund.
Number
A $25M solo fund pays ~$625K/year in management fees
Sam works out the economics of a solo capitalist's fund: taking a 2.5% management fee on a $25 million fund yields $625,000 a year in salary before any carry.
$625K
Annual management fee income on a $25M fund at 2.5% · USD/year
“So 2.5 of 25 is— so you have, you have $625,000 a year in salary off a $25 million fund.”
Number
5x on a $25M fund = ~$20M of carry to the solo GP
Shaan walks the carry math: a $25M fund returning 5x produces $125M, leaving $100M of profit after returning capital; at 20% carry the solo GP keeps about $20M, realized when the fund winds down after ~10 years.
$20M
Carry to solo GP on a 5x $25M fund · USD
“I don't know, 125 million. 125 million. You pay back the 25 first, so now there's 100 million of profit. Of the 120— 100 million of profit, you keep 20%. That's 20 million. So you might make 20 million at the sort of in the termination of the fund, basically after 10 years.”
Story
Returning a $10M fund on paper in 18 months — then don't over-raise
Brianne says her first fund (a bit north of $10M) returned itself on paper within 18 months, and uses it to argue against the urge to immediately raise a $100M fund: start where you are, build concentration with SPVs and secondaries, and don't overextend your reputation.
“For Fund 1 to raise a little bit north of $10 million and to return it in the first year and a half, like, that's a pretty safe bet, um, and one where I didn't overextend myself in a way where it could impact my reputation. That's something that I do encourage people. I'm like, start with where you are today, um, and find ways to keep building concentration over time.”
Steal thisRaise a fund you can credibly return rather than the biggest one possible; protect your reputation and build concentration over time.