How An Open-Ended Venture Capital Fund Operates
Update: 2025-01-29
Description
In part 2 of my discussion with Ben Miller, CEO of Fundrise, and sponsor of Financial Samurai, I ask him about how an open-ended venture capital fund works.
If I’m going to build a $500,000+ position in an open-ended fund to gain more exposure to private AI companies, I want to fully understand how the fund operates.
Here are some of the questions I asked during our discussion:
- What happens to a private company that successfully goes public, and how does this impact the fund?
- Is it harder to identify a promising company or to actually invest in that company?
- How does Fundrise and other venture capital firms compete to gain access to invest in private companies?
- How does Fundrise approach risk management in its investments?
- What’s the process for writing checks to invest in companies?
- If you don’t have cash on hand, how do you secure a line of credit to invest in a company?
- How do you provide liquidity to investors in the Innovation Fund?
- How do you determine the size of a fund you want to run?
Related post: Why I'm Only Investing In Open-Ended Venture Capital Funds Going Forward
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