We rolled our sleeves and started digging for the best learning materials from courses, workshops, talks, and anything else that helped our existing community of investors learn the basics of startup investments. So, use the resources below to explore your most exciting topics!

Next, we’ll navigate through the fundamental elements of a venture capital fund, a fund structure, its core processes, and how investors negotiate their deals and build their diverse portfolios.

Venture capital funds 101

The Venture Capital University starts its 8-week training program with an introductory overview of the fundamental questions raised by any investor hoping to build or join a VC fund.

VC University ONLINE is a practical training program for entrepreneurs turned investors, new fund managers, and any professional looking to understand how this works. All the courses and activities are online, and you can study them at your own pace. However, registration for the program happens only a few times yearly when a new cohort is opening up.

However, we know resources are limited, and we built a list of additional articles and resources you can study.

What is an angel investor

Angel investors are independent experts and professionals who aim to support and finance other ideas and startups they believe in. This type of investor often decides to support a startup very early on, providing access to seed capital and his own knowledge or network of other experts.

Read our guide to becoming an angel investor.

What is a family office

Family offices are private companies operating similarly to VC funds. The main difference is that a family office uses its own wealth and financial assets to invest in startups rather than external capital.

Read our guide about family offices.

What is a venture capital fund

AngelList has a comprehensive guide explaining in detail what is a venture capital fund, why its mission is to invest in startups in exchange for equity, and which are their primary sources for raising capital. The article also does a great job of explaining:

• How a VC fund is structured.
• Who manages the fund operations.
• The role of general partners (GP) and limited partners (LP).
• How VC funds make money.
• What are the different stages of venture investments.

Read the complete guide on AngelList.

Understanding the structure of a venture capital fund

A few key players operate a venture capital fund, and we’ll learn more about them from Dealroom and Going VC below. The structure starts with investors, also known as LPs (the part which brings the money to be invested by the fund), and the venture fund management (GPs).

The capital can come from various types of LPs, such as pension funds, family offices, foundations, high-net-worth individuals, and other organizations looking to invest in startups.

Source: Venture Capital Deal Structure & Terms: Complete Guide (2022)

There are various types of venture capital companies, some oriented on the startup stage (early, mid, or late), some investing based on their location, and others channel their portfolio in specific industries.

Read Dealrooms’ guide on venture capital deal structure and terms here.

How Venture Capital Works: A Beginners Guide.

How VC funds work

Osler, Hoskin & Harcourt LLP from the United States recorded one of their educational presentations about how a venture capital firm actually works. The 40-min video completes the perspective offered by the AngelList guide adding a bit more context.

We learn when business angels and VCs enter the lifeline of a startup, what roles they play along its growth curve, and how it changes with each new round raised.

Watch how VC funds work here.

How to raise a VC fund

Cristopher Mirabile and Hambleton Lord from Seraf Investor did a great job outlining the process of raising a VC fund with all the ins and outs required. You start right from the basics and go through:

• The role you want it to have in the startup ecosystem.
• The differences between VC investing vs. angel investments.
• The skills needed for your team.
• How to build an investor pitch deck.
• ... and many others that we’ll let you explore in this series.

Read the 3-part series here:

• Venture Capital Prospecting: How To Raise a VC Fund (Part I)
• Venture Capital Prospecting: How To Raise a VC Fund (Part II)
• Venture Capital Prospecting: How To Raise a VC Fund (Part III)

How to manage a venture capital fund

We’re returning to AngelList for another guide featuring the logistics behind a VC fund. AngelList explained how to create a business entity to support the activity of the venture company, what resources you need, and everything else you need to know about this process.

Read the complete guide on AngelList.

The VC funding process - from A to Z

Learning the core areas of the investment process is the first step in understanding how venture capital works. The structure includes the VC’s mindset, a startup scouting & analysis process, how the funding cycle looks like, due diligence & other legal procedures, the negotiation phase, closing of the deal, and what happens once the investment is raised.

Below, we’ll try to guide you through these elements and take a short break at each step to discover where you can learn more.

The venture capital mindset

We make the first stop at Partech Ventures, where Boris Golden explains how venture capital investors typically think and what we should be aware of when entering this field.

Boris shares how VC investors deal with a lot of uncertainty and risks, place their bets on companies with high stakes and dream about a higher return.

Read Boris's guide about Understanding VCs.

Investment cycle explained

Once you know what venture capital investors think, learning what the investment cycle looks like is essential. Here, we recommend the first module of the Oxford Entrepreneurship: Venture Finance Programme, which explains it step by step.

If you can’t decide yet to join the program, here is a simpler alternative from Silicon Valley Bank about the stages of venture capital.

Join Oxford Entrepreneurship: Venture Finance Programme.

Read about the stages of venture capital.

Startup scouting & deal analysis

A venture capital fund often hires an investment expert or a VC Analyst to support the fund’s investment activities. That person will work closely with the fund’s General Partners and VC investors to assess the market and identify new investment opportunities. Another option is to work closely with a Venture Scout, who will pass potential startups to you.

The larger the venture capital fund and the more the market is expanding, it becomes challenging to have a clear overview of what’s happening in the market. This is why VC funds like Accel, Sequoia, or Atomico started launching startup scouting programs.

Learn more about startup scouting from Going VC.

Learn how scout networks are gaining traction in Europe from Pitchbook.

Due diligence and legal procedures

Investors deal with a lot of paperwork during the whole investment cycle. One of the earliest actions in the process is conducting due diligence that will indicate the transaction is a good deal from all points of view.

The due diligence process helps investors to reduce possible risks associated with the transaction by verifying the information founders provide in the startup pitch deck. A thorough analysis will allow them to assess business and market potential, financial statements and forecasts, legal documents, and all sorts of risks. This is a long process; it can take between a few weeks and a few months.

A full perspective on how due diligence looks like is offered by 500 startups, through their VC Unlocked program, in Silicon Valley. This webinar part of the program goes from making a great introduction to what due diligence is to dive deeper into each type with actionable tips and tricks for investors.

Watch (VC Unlocked) The Basics of Due Diligence.

The negotiation phase

After deciding to invest in a particular startup, there’s a process of ongoing discussions with the startup founders. The goal is to reach an agreement and find the best path for both parties.

You, as the investor, want to make sure the deal it’s the best option for your fund’s strategy and approach, with a solid potential to generate a good ROI. Wharton Executive Education runs an individual educational program about Negotiation and Influence: Making Deals and Strategy Work.

Join Negotiation and Influence: Making Deals and Strategy Work.

Exit strategy for investors

What is an exit, and what does it mean for investors?

Before diving in-depth into performance metrics, startup valuations, what happens in the upcoming rounds, and how an investor plans his exit strategy. Nexea has a great overview of what an exit represents for an investor, how many types of exits you have available, and everything else you need to know about it.

Learn about exit strategies for investors.

Startup valuation methods

Duke University has a specialized section about startup valuations as part of the bigger Entrepreneurial Finance program focused on strategy and innovation. You learn from the basics of valuation, how to build your own model and apply it to high-growth startups, and how this differs from VCs to angel investors.

Learn Startup Valuation Methods.

How deal terms impact valuations

There is a strong correlation between what you sign on papers and the potential valuation a startup can have. Techstars explains how investors can determine the stock price paid in a specific financing round. Additionally, you learn what dilution is and what protection methods you have at hand on post-funding ownership levels for both you and the founders.

Learn more about deal terms, dilution, and evaluations.