What is Co-Investment?
Co-Investment
Co-Investment is a direct investment made by a fund's Limited Partners alongside the General Partner in a specific portfolio company, typically bypass fund fees.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding Co-Investment helps founders model equity distributions when structuring rounds for large-check venture rounds and strategic partner syndication.
Detailed Deep Dive
Co-Investment programs allow institutional investors (LPs) to make direct investments alongside the venture fund, maximizing their exposure to high-performing startups while optimizing fee structures.
Frequently Asked Questions
Q:Why do LPs like co-investments?
They can invest capital directly in high-performing startups without paying management fees or carried interest on those co-investment checks.
Q:Why do GPs offer co-investment opportunities?
It allows them to lead larger funding rounds and support portfolio companies beyond the fund's concentration limits.
Quick Facts
- CategoryFunding
- Key ApplicationLarge-check venture rounds and strategic partner syndication
Coverage Trend12 Weeks
Related Startup Terms
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