fund lifecycle

Definition

The typical 10-year lifespan of a venture capital fund from raising money to returning capital to LPs, with investment happening in years 1-5 and exits in years 5-10. It's why your VC keeps asking about your exit timeline.

Example Usage

Their fund is in year 8 of its lifecycle, so they're pushing all portfolio companies toward exits to generate returns.

Origin

Private equity and venture capital fund structuring standards

Fun Fact

Fund lifecycles explain why VCs can't wait forever for your moonshot—their LPs want their money back, preferably with gains.

Source: Private equity and venture capital fund structures

Related Terms

Intermediate

pro rata rights

The sacred privilege granted to investors allowing them to maintain their ownership percentage in future funding rounds by ponying up more cash. It's like a VIP pass that lets you keep throwing money at a company before it becomes wildly successful or spectacularly flames out.

🚀 Startup / VC

Beginner

Scale

The startup obsession with growing bigger, faster, and more unsustainably, as if a company were a goldfish and the market were an ocean. Everyone wants to scale, few know how, and most just end up spending more money to lose money at an impressive rate.

🚀 Startup / VC

Advanced

hurdle rate

The minimum return a VC fund must achieve before partners can collect carried interest—usually 8% annually. The bar LPs set to ensure their capital at least beats a boring index fund before the GP gets rich.

🚀 Startup / VC

Intermediate

pro forma

Financial projections showing what a company's metrics would look like under hypothetical conditions or future scenarios. Latin for 'as a matter of form,' startup-ese for 'this is the fantasy we're selling investors.'

🚀 Startup / VC

Beginner

investor

Someone who gives you money in exchange for a piece of your company, future profits, or the thrill of watching their capital evaporate. They're either your best friend or worst nightmare, depending on whether your quarterly numbers are trending upward. In startup land, they're the people whose calls you always take.

🚀 Startup / VC

Beginner

seed

The first real money a startup receives from external investors, typically ranging from $500K to $2M, given in exchange for equity to entrepreneurs brave (or delusional) enough to think their idea will change the world. This is the stage where your pitch deck matters more than your product, and your co-founder's LinkedIn connections matter more than your revenue. Named 'seed' because most of these investments will never grow into anything, much like actual seeds.

🚀 Startup / VC

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