Micro-VC fund management and capital account statements

I’m a personal investor in about 20 micro-VC funds. Recently one of the GPs of one of those funds asked whether or not it was important to me to receive a quarterly capital account statement, or if they could do it just once a year, or even “never”.

I shared with her that my perspective was that quarterly is more typical and perceived as more professional. Further, I thought it would also be appreciated by her more sophisticated high net worth investors, because many of them will have personal financing reporting prepared quarterly by a family office or personal accountant or tax planner.

She told me that most of her Limited Partners (investors in her fund) didn’t seem to care about the frequency of capital account statements.

So, like any other engineering minded person would do, I decided to gather some data. Rather than just sharing it with her in email, I’m posting that data here for the benefit of all. It was collected by looking at the reporting from around 50 micro-VC funds (include the ones I’m invested in but also Techstars in-network funds born out of our system as well as those that a few of my friends are invested in).

It turns out that 73% of the sample of micro-VC funds issue quarterly capital account statements. 27% do this annually via only the K-1 or an annual capital account statement.

If you’re running a micro-VC fund, I hope this sample of about 50 of your peers gives you some insight. I recommend quarterly capital account statements as it’s just the most professional thing to do. That said, if your LPs only want/need it annually, you can save yourself a little money and skip it as about 1 in 4 seem to do.

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