Fund Structure
Last updated
Quick Answer
A fund with no fixed end date that continuously reinvests returns rather than distributing them and winding down.
An evergreen fund (or open-ended fund) operates with no predetermined liquidation date. Unlike traditional closed-end venture funds with 10-year lifespans, evergreen funds recycle investment returns into new investments indefinitely. Investors can typically redeem their interests periodically rather than waiting for fund liquidation. This structure is common among family offices and some corporate venture arms.
In Practice
The family office's evergreen VC fund had been operating for 15 years, continuously reinvesting returns into new deals without ever making a final distribution to its single LP.
Why It Matters
Evergreen structures eliminate the pressure to exit investments within a fixed timeline, potentially improving returns. But they also reduce LP liquidity and can create valuation challenges for unrealized portfolios.
VC Beast Take
Evergreen funds solve the timeline problem but create an accountability problem. Without a forced liquidation, how do you know if the fund is actually performing?
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An evergreen fund (or open-ended fund) operates with no predetermined liquidation date. Unlike traditional closed-end venture funds with 10-year lifespans, evergreen funds recycle investment returns into new investments indefinitely.
Understanding Evergreen Fund is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Evergreen Fund 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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