Fund Structure
What is fund administration?
Quick Answer
Fund administration is the back-office operations of a VC fund — accounting, capital call processing, NAV calculations, investor reporting, tax preparation (K-1s), and regulatory compliance. Most funds outsource this to third-party administrators.
Detailed Answer
Fund administrators handle the operational infrastructure that keeps a VC fund running smoothly. They're the financial backbone behind every fund.
Core fund admin services: - **Accounting** — Fund-level bookkeeping, expense tracking, portfolio valuations - **Capital calls & distributions** — Processing investor transactions - **NAV calculations** — Net Asset Value reporting (quarterly) - **Investor reporting** — Quarterly/annual reports to LPs - **Tax preparation** — K-1 tax forms for each LP - **Regulatory filings** — Form PF, Form ADV, annual compliance - **Audit support** — Working with the fund's auditor
Leading fund administrators: - Juniper Square, AngelList, Carta (tech-forward, popular with emerging managers) - Citco, SS&C, State Street (institutional-grade, large funds)
Cost: Typically $30K-$100K/year for an emerging manager fund, scaling with fund complexity and LP count.
Why it matters: LPs expect institutional-quality reporting and compliance. Poor fund administration is a major red flag during LP due diligence and can disqualify emerging managers from institutional capital.
Related Questions
What is venture capital?
Venture capital is a form of private equity financing where investors provide capital to early-stage, high-growth startups in exchange for equity ownership, typically expecting 10x+ returns over 7-10 years.
How do venture capitalists make money?
VCs make money through two streams: management fees (typically 2% of fund size annually, covering operating costs) and carried interest (typically 20% of fund profits above a hurdle rate, which is where real wealth is built).
What is carried interest in venture capital?
Carried interest (carry) is the share of investment profits — typically 20% — that fund managers (GPs) earn as performance-based compensation after returning LP capital plus a preferred return (usually 8%).
How do you raise a venture capital fund?
Raising a VC fund involves establishing a legal entity (LP structure), defining your thesis and target fund size, building a track record, creating fundraising materials (PPM, pitch deck), and securing commitments from LPs over 6-18 months.
The operating system for private capital.
Archstone runs the back office for venture, PE, real estate, and credit funds — LP reporting, capital calls, portfolio tracking, and fund accounting, in one platform. Now in alpha.