VC is a broad term.
Most of the time the Chinese and Indian operations of VC funds are separated from the American fund, and have a different set of partners and a different pot of money.
It was because of this that international funds like Sequoia divested their American fund from their Chinese and Indian funds.
This was a reason behind why YC ended up shutting down YC India and YC China around 2018-19 (but also because they couldn't compete with Sequoia India-now-Peak XV Surge or Antler in Asia)
Accel and Sequoia did/do this.
Seqouia's got tricky because their US fund is heavily invested in US Sustainability tech, and they were overinvested in China leading to reputational issues for their US fund
They go to the partners managing the individual fund.
A VC Fund is basically like a bottle of wine.
Each fund raises a vintage, and any profit (or loss) from that vintage is kept within the vintage itself.
VCs make money from their operating funds - they charge investors around 1.5-3% (depending on fund size) in Annual Management Fees.
That money goes to the staff of the Fund who are operating the vintage to pay for salaries, office space, business expenses, etc.
Most VCs end up making way less money than if they remained a PM or Engineer, but the work is intellectually rewarding and upsides/fame can be massive.
Perhaps a better way to phrase it is that each firm is like a real estate patent corporation and each fund is its own separate but owned corporation, the way commercial real estate companies incorporate every building.
If one VC fund lost money, only the LPs would suffer, the firms other funds would still operate independently.
Great point! Wasn't sure if most readers on HN know that fact though.
Though,
> Bottles of wine are not separately incorporated
is starting to happen in a way.
Lots of Wines are just a brandname now with different vintages just being sourced from different growers and fermenters directly, so a no-name Winery could rent out an established brand and it's associated cache
https://www.sequoiafund.com/performance/
Do the numbers here include that 1.5-3% or should it be subtracted out? It looks like they have severely underperformed the SP500 for the last 3, 5, 10 years.
> It looks like they have severely underperformed the SP500 for the last 3, 5, 10 years.
Yep! That was why Sequoia Fund (the US operation and brand owner) had India+SEA and China funds created in the 2010s and why they began restructuring in 2020-23 [0]
[0] - https://www.axios.com/2021/10/26/sequoia-capital-fund-ventur...
Edit to add that this also goes for plenty of companies: See Microsoft with their AI center in Beijing despite being a major provider of services to the U.S. government.
https://thedispatch.com/article/microsoft-issues-warning-abo...