This is part of my
series on Understanding Venture Capital. I’m writing this
series because if you better understand how VC firms work you can better
target which firms make sense for you to speak with.
It is not uncommon to see a VC talk about “total assets under management” as in “We have $1.5 billion under management.” I don’t really understand why VCs do this since it’s mostly a meaningless number. I’m writing this post to explain to entrepreneurs what you should be thinking about in terms of the VC’s you approach and the size and stage of their funds.
What is total assets under management? - VC’s often talk about this term as in the total amount of funds EVER raised by that VC. Example: if a VC is on their fourth $200 million fund that they just raised in 2009 then you might hear them talk about $800 million under management. This is ONLY relevant in so much as it will tell you that they’ve been able to raise a lot of money historically. But without knowing whether they had a $700 million fund and now have a $100 million fund or whether they’re a first time fund of $800 million it’s pretty meaningless. It’s also meaningless if they had four $200 million funds and the last one they closed was in 2000.
To read the full, original article click on this link: Does the Size of a VC Fund Matter?
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