The fund is a closed-end fund with an established 4-year fund life (plus two potential 1-year extensions should market conditions dictate such a decision). Hence, we expect our investors to remain invested in the fund for the duration of that period. In comparison to the standard 8 to 10-year fund lives of most venture and PE funds, we feel our time frame is quite reasonable.
With that said, we are acutely aware of the importance of liquidity. As a result, we have structurally designed the fund to self-liquidate over the duration of the fund life.
During the first twenty-four (24) months following the final closing (planned for Q4 2020), the fund intends to reinvest all exit proceeds back into the fund. Following the expiration of the reinvestment period and for the remaining life of the fund, all exit proceeds will be delivered pro-rata to the investors in the fund, analogous to a dividend.
The primary ways a company will exit the fund will be via (1) IPO, (2) Acquisition, or (3) a systematically triggered exit via the private secondary market.
Lastly, we will allow for LPs to seek a sale of their stake via secondary brokerage platforms, such as Forge, but these sales are subject to normal market conditions and we cannot guarantee there will be willing buyers in the market.