Organisational structure of investing / consulting LLCs? (by example of seed accelerator Y Combinator)
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I wonder how companies like Y Combinator are structured. Y Combinator is a seed accelerator, investing in and consulting businesses. On Y Combinator's web site, there is a list of partners. Y Combinator is registered as an LLC.
In particular I wonder:
- Does partner mean that the person has a share in the company? An equal share?
- Is it possible that partners are guaranteed a share in the businesses that they consult?
- Who owns the fund which is the source for investments?
Consulting Corporate Structure Investors Shares Ycombinator
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@TimJ Why the down votes and the closing? I thought that questions about company structure were on topic. This particular question arose from debates with a friend who is trying to set up a seed accelerator. – Feklee 11 years ago
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Perhaps you could re-phrase the question to make it more relevant and on-topic. Have you visited the Y Combinator site and done research on them elsewhere on the web? Perhaps you should try contacting them. – Tim J 11 years ago
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@TimJ Thanks for the suggestion. I now edited the question. I did a lot of reading on Y Combinator over the past years. However, there obviously is information which is not public. On the other hand, I assume that there are certain standards how companies like Y Combinator (consulting, investing) are usually run. – Feklee 11 years ago
1 Answer
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I don't know about Y-Combinator in particular but most investing funds are organized the same way.
Usually, there is a management company which manages a fund of money on behalf of limited partners who put in the money. The management company partners are called general partners.
- Partners have shares in the management company, yes. They do not have to be equal shares
- General Partners are not necessarily granted shares in the portfolio companies themselves, but the Limited Partners are.
- The fund is owned by the Limited Partners in proportion to the amount of money they each invest.
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