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Sidecar funds primer: How do sidecars work in practice?

Paul Clark
Paul Clark
Last updated: June 4, 2024
Venture south fallback

To distill the concepts of the last post into a concrete example: consider a typical VentureSouth angel sidecar fund.

  • It’s a Limited Partnership
  • It’s “triggered” to invest when 10 or more VentureSouth members invest, in aggregate, $100,000 or more in an investment. Investments that attract fewer than 10 checks, or 19 x $5,000 checks, do not trigger the fund, so it does not invest.
  • Its match is up to 1:1 of the amount invested by VentureSouth angel group members, up to a maximum investment of $250,000 per company.
  • And the administrative oversight is provided by the VentureSouth central team (as the fund’s General Partner).