Fund Structure
Last updated
Quick Answer
The timeframe during which a VC fund actively makes new investments, typically the first 3-5 years of a fund's life.
The deployment period (or investment period) is when a fund actively writes checks into new companies. After this period, the fund shifts to follow-on investments and portfolio management. Management fees often step down after the deployment period ends.
In Practice
The $300M fund deployed 70% of capital in years 1-3, reserving 30% for follow-on investments in the strongest portfolio companies during years 4-7.
Why It Matters
Deployment pace affects returns. Investing too fast can mean lower-quality deals; too slow can mean missing market windows. LPs monitor deployment pace closely.
VC Beast Take
Deployment pace is the metronome of venture capital. Too fast and you're spraying. Too slow and your LPs are paying fees on idle capital.
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The deployment period (or investment period) is when a fund actively writes checks into new companies. After this period, the fund shifts to follow-on investments and portfolio management. Management fees often step down after the deployment period ends.
Understanding Deployment Period is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Deployment Period falls under the fund-structure category in venture capital. This area covers concepts related to how venture capital funds are organized, managed, and governed.
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