Fund Structure
Deployment Period
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.
Related Concepts
Further Reading
Why Most Venture Capital Funds Lose Money
The median VC fund barely returns invested capital. Here's why the power law makes venture so brutal, what separates winners from losers, and what the data actually shows.
How VC Fund Economics Work: 2 and 20 Explained in Depth
The '2 and 20' model powers every venture fund, but most people misunderstand how GPs actually make money. Here's the real math behind management fees, carry, and fund economics.
LP vs GP: How Venture Capital Fund Structure Works
A clear explanation of how venture capital funds are structured, the roles of limited partners and general partners, fee economics, and how fund structure affects startup founders.
The VC Due Diligence Process: What to Expect
A founder's complete guide to the venture capital due diligence process — what investors examine, how long it takes, common red flags, and how to prepare your startup for scrutiny.
What Is Venture Capital and How Does It Work
A comprehensive guide to venture capital — how it works, who the players are, and why it matters for startups seeking growth capital in today's market.
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