Can VCs Cut Startups Personal Checks Behind Their Firms' Backs?

Marc Andreessen

Photo: Joanne Wan

“Do venture capitalists put their own money in their investments?” asks a Quora user.According to Marc Andreessen:

“Different venture capital firms have different policies on whether GPs are allowed to personally invest (side by side with their firm) in a startup that their firm is funding.  Also, different firms have different policies on whether GPs can invest in startups in which their firm is not investing (sometimes called “cherry-picking”).

“In our case, we chose to implement a blanket policy that our GPs are not allowed to make direct personal private technology investments, whether side by side with our firm or otherwise.  We felt like that was an LP-friendly thing to do since it eliminated any risk that our LPs wouldn’t benefit from investment opportunities that we see.  We also chose to make our own investments in our own funds subject to the same fees and carry that our LPs pay.”

For more answers to this question, head over to Quora >

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