Urvaksh broke the news on Friday about a new $10 million seed fund called Tech Square Ventures run by Blake Patton . Atlanta has a dearth of seed stage, high risk capital, so this is great for the city. Blake is an experienced operator who is well-regarded in the startup community, having run several venture-backed companies, making him an ideal person to lead a new fund.
From an entrepreneur perspective, I think it’s important to understand how a $10 million seed fund typically works:
- Capital is committed but not sitting in the bank (it has to be called from the investors, often at a rate of 20% per year for five years)
- 99% of the capital is from investors and 1% is from the partners
- 2.5% of the total fund amount is made available for the first five years for operating costs (e.g. $250,000/year to pay for salaries, office space…
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