Fund of Funds
Definition
A fund of funds invests in other investment funds rather than directly in companies, giving its investors diversified exposure to many VC portfolios at once.
How it comes up in fundraising
Funds of funds are a major LP category for venture firms; founders rarely interact with them directly, but they shape which VCs have money to deploy.
Frequently asked questions
Why do funds of funds matter to the startup ecosystem?
They channel institutional money into emerging VC managers, indirectly determining how much early-stage capital exists.
Do funds of funds ever invest directly in startups?
Some run co-investment programs alongside their fund positions, typically at later stages.
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