A useful investor meeting starts with understanding the investor as well as your own company. A fund’s size, strategy, ownership aims and decision process can affect whether an opportunity fits, even when the business is promising.
A schematic, not a legal structure diagram. Cash is called, invested and distributed over time; actual arrangements differ.
Who is making the decision?
Limited partners, or LPs, provide capital to a fund. General partners, or GPs, manage its investments. The firm may also have analysts, associates, principals, platform staff and an investment committee. Titles alone do not tell you who can approve a deal.
Ask who would lead the investment, what the remaining steps are, what evidence is needed and who participates in the decision. Use the answer to prepare the next conversation. Do not assume that every fund follows a fixed number of meetings or that an enthusiastic first contact can commit capital.
What are they looking for?
Start with fund fit: stage, geography, sector, cheque size and the role the fund expects to take. Then understand the particular questions the investor needs answered about your business: customer need, team, product, market, economics and the evidence that could support a large outcome.
The emphasis differs. A technical investor may examine feasibility in detail; another fund may need evidence about distribution or retention. Ask what would change the team’s conviction, rather than assuming one deck template satisfies everyone.
Why does ownership change the maths?
In Returning the Fund, Fred Wilson describes his preference for investments with the potential to return the fund. Treat that as one investor’s lens, then ask whether and how your prospective investor uses it.
Here is our own simplified arithmetic. A hypothetical $100M fund owns 10% of a company at exit. A $1B equity exit would produce $100M of gross proceeds to that stake. This assumes ownership participates pro rata and ignores preferences, fees, expenses, tax and transaction costs.
| Ownership at exit | Equity exit required | Gross proceeds |
|---|---|---|
| 10% | $1B | $100M |
| 6.4% | $1.5625B | $100M |
| 5% | $2B | $100M |
The middle row shows a 10% stake diluted by two rounds in which new shares each represent 20% of post-round ownership, with no follow-on participation: 10% × 80% × 80% = 6.4%. The exit required for $100M gross proceeds becomes $100M ÷ 6.4% = $1.5625B.
This is a way to understand a conversation, not a required outcome for your company. A portfolio has other investments and losses; gross proceeds from one holding are not the same as a net return to LPs. Follow-on reserves and participation can change ownership and capital invested.
What do fees and carry pay for?
Management fees support running the fund. Carried interest, or carry, is a share of profits under the fund’s agreed terms. Carta’s 2025 fund-economics report documents variation across funds; a familiar fee label is not a substitute for the actual agreement.
For a deliberately simplified illustration, a 2% annual fee on a $100M calculation base is $2M for that year. The base, duration and later step-downs matter. Separately, if $100M of contributed capital ultimately produces $300M before a 20% profit share, the simple profit is $200M and that share is $40M. Real fund waterfalls can contain other provisions, and this example excludes fees and expenses.
Paper value and cash are different.
Carta’s TVPI explainer distinguishes total fund value from realised distributions. With $100M paid in, $40M distributed and $80M of remaining value, TVPI is ($40M + $80M) ÷ $100M = 1.2×. DPI, the distributed cash multiple, is $40M ÷ $100M = 0.4×.
The remaining $80M is a valuation, not cash returned. State whether a number is a projection, an unrealised mark or an actual distribution. That distinction matters when discussing performance.
Questions for the next meeting.
- Which fund would invest, and what stages and cheque sizes does it cover?
- Who would champion the investment and who approves it?
- How does the fund think about ownership and follow-ons?
- Which assumption in this business needs the strongest evidence?
- What should we prepare for the next decision?
These are educational examples, not advice on fund terms, securities or what you should raise. Use actual deal documents and appropriate advisers for a transaction.