Forming a venture capital fund and finding willing Limited Partners is a time-consuming and challenging task. For a variety of reasons, a fund’s Limited Partners may become tired. In addition, these Limited Partners may decide they do not want to participate in any future funds and are not committed to the firm or the asset class for the long run.

If a venture firm and its Limited Partners mutually decide that the investor base would be better served by selling their positions, a secondary firm can acquire all investor interests and restructure the fund. Typically, the restructured vehicle will have an extended term along with carried interest calculated from the secondary firm’s cost basis. These renewed terms offer the General Partner the possibility to receive carried interest when this might be otherwise impossible.

While no firm wants to find itself in this position, selling Limited Partnership interests allows the firm to acquire a new, interested investor, return some capital to its initial investors as well as support its existing portfolio with renewed energy as carried interest becomes a real possibility. The transaction is completed with efficiency and without public disclosure to protect the reputation of the firm and the sellers.

Industry Ventures has a dedicated team that will work closely with the General Partner and Limited Partner to complete a timely transaction. Their experience and knowledge allows them to move through the process quickly—from portfolio evaluation, to the issuance of a Letter of Intent (LOI), through final due diligence, legal document preparation, and deal consummation.

Industry Ventures, L.L.C. is a leading investment firm that capitalizes on inefficiencies within venture capital and technology growth equity. The firm invests in both secondary and primary opportunities, including direct portfolios, secondary directs, limited partnership interests and other special situations. Headquartered in San Francisco, with offices in the Washington, D.C. area, the firm manages more than $450 million of institutional capital.