SAN FRANCISCO, July 10 Most venture capital
firms give cash to entrepreneurs. Now Upside Partnership plans
to give them a stake in its new fund, too.
The $30 million fund, announced on Thursday, is the
brainchild of Kent Goldman, a former managing partner at First
Round Capital. Upside will invest at the seed stage, meaning
very early in a startup's life.
In a highly unusual move, part of the fee the fund takes on
profits will go directly to the fund's entrepreneurs. Normally,
those fees go directly to the fund's partners, not the
entrepreneurs whose projects get financing from the fund.
Those fees, known in the venture capital business as carry,
are generally around 20 percent to 30 percent of the profits. A
percentage of that fee, described by Goldman as in the double
digits, will go to entrepreneurs.
"We believe this will strengthen the bonds of our founder
community," Goldman said in a blog post, adding that founders
often get good advice from other founders.
"We want to encourage this type of collaboration."
(Reporting by Sarah McBride; Editing by Jan Paschal)