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GS may get a special deal forever, the key is leverage the GS snob appeal with other LPs.

I did a biz Dev deal with IDC many moons ago. They charged companies $30k to get IT benchmarking data that included Dell, IBM, HP and Cisco.

Dell, IBM, HP and Cisco paid nothing, but 100 other companies paid $30k annually, creating a $3m annuity at 90% gross margin.

So that model works if the GS card really moves the needle for other LPs the way Dell, IBM, HP and Cisco did for the 100 other tech companies.

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Neil Callahan
Rosemont Seneca
917-945-9516

> On Mar 20, 2014, at 7:45 PM, John DeLoche <jdeloche@rosemontseneca.com> wrote:
>
> Btw there would be not cross over between the funds. Their first investment performance would be measured independently from this new deal.
>
> The trouble is in bringing in other LPs. GS knows they got a special deal. If we give this deal to others it is hard to support 2 and 20 in the fund. We need to be thoughtful and practical about how we do this.
>
> Sent from my iPhone
>
>> On Mar 20, 2014, at 7:40 PM, William Lee <wlee@rosemontseneca.com> wrote:
>>
>> Devon, nice job on the math! If GS puts $15m to Counsyl at series D under the same term as last round secondary, the carry interest could be more difficult to hurdle over, comparing to the last secondary round. GS going into our 2/20 fund is the way to go, and the benefit for RSTP far outweighs anything. I completely agree on having them in the fund and no fees on the co-investment.
>>
>> William Lee
>> Rosemont Seneca Technology Partners (RSTP)
>> Sent from my iPhone
>>
>>> On Mar 20, 2014, at 7:15 PM, John DeLoche <jdeloche@rosemontseneca.com> wrote:
>>>
>>> Yes, that's the logic. Just an idea now. We will see where it goes. Their preference may be the full $15 in a side fund. We may be able to get the full $15 plus a fund commitment.
>>>
>>> Sent from my iPhone
>>>
>>>> On Mar 20, 2014, at 7:05 PM, Devon Archer <darcher@rosemontseneca.com> wrote:
>>>>
>>>> So we would basically give up $150k annually and the carry on the $15mm in order for them to come into the fund for $2.5-$5mm type range.
>>>>
>>>> At $5mm you've already replaced $100k of annual revenue.
>>>>
>>>> The carry portion a little more to swallow because if Counsel does what we think that's several million.
>>>>
>>>> Probably a smart move still though in that the goal and real wealth creation will be a result of raising and investing the fund 2, 3, 4 and 5. Goldman as an anchor helps start that story.
>>>>
>>>>> On Mar 20, 2014, at 9:34 PM, John DeLoche <jdeloche@rosemontseneca.com> wrote:
>>>>>
>>>>> Just got off a call with GS. They gave approval to lob in the term sheet to Counsyl today. They will put in $15mm into a vehicle on same terms as our prior deal.
>>>>>
>>>>> I floated the idea of them committing to the fund directly and then investing on a no fee no carry basis the balance. It would help us a lot more if we could tell people GS is paying us 2 and 20 in our main fund, even for a nominal amount. Doing so in this deal could be economically better to them but allow us to credibly say they are in the fund.
>>>>>
>>>>> We agreed to figure it out tmw in person either before or after the Counsyl DD meeting.
>>>>>
>>>>> Let me know your thoughts.
>>>>>
>>>>> Would be great for all who are in the Bay Area tmw to join for the Counsyl meeting and lab tour (12:30-2:30).
>>>>>
>>>>> Best,
>>>>>
>>>>> John
>>>>>
>>>>> Sent from my iPhone