How top GPs quietly invest $100M out of a $50M fund

Hi! I’m glad you’re here. You’ve made it to issue #93 of VC Demystified🪄.

My name’s Nicole - I’m a Principal at an early stage venture fund, and I know firsthand that VC can often be a black box. Breaking into the industry may feel daunting and resources can seem scarce and inaccessible. I wanted to put together a newsletter to give others the playbook I wish I had when I first started.

Today’s deep dive: The inside playbook for turning a $50M fund into $100M+ of exposure without raising a bigger fund

^{My personal mission is to open as many doors as possible for other people and this newsletter is just one avenue to do that. As always, I will continue to post VC insights daily for free across my socials. This newsletter may contain paid partnerships or affiliate links.}

Read time: 6 minutes

The inside playbook for turning a $50M fund into $100M+ of exposure without raising a bigger fund

Most GPs believe they’re limited by their fund size. If you raise a $50M fund, the world sees you as a “$50M manager.”

That number becomes your identity, your perceived power, relevance, and ceiling.

The most sophisticated GPs know that number is just a baseline.

They understand that fund size doesn’t determine outcomes. Exposure to winners does. And the quiet secret to punching above your weight class is the opportunistic sidecar.

It’s how a $50M fund turns into $100M+ of active AUM, while defending ownership in breakout companies and materially increasing GP upside.

Here’s how the pros actually play the game.

The problem: the concentration ceiling

Most fund documents cap single-asset exposure at 10-20%, meaning one company can’t make up 20%+ of your invested capital. This guardrail protects LPs, but it creates a winner’s curse for GPs.

Imagine your seed-stage rocket ship is breaking out at Series B. You have:

• High conviction

• Pro-rata rights

• A $10M allocation you want to take

But your fund is legally not allowed to invest that much because it breaks the 20% concentration ceiling for your fund.

If you do nothing:

• You get diluted

• Ownership erodes

• The fund’s returns suffer

This is where unsophisticated managers stop constrained by fund mechanics.

Sophisticated GPs don’t!

The solution: the opportunistic sidecar

Instead of walking away from the overflow allocation, top GPs spin up a deal-specific SPV alongside the fund.

The structure is clean:

• The fund takes its full, entitled allocation

• The SPV absorbs the excess

• LPs get the option to increase exposure to a proven winner

No strategy drift. No random capital. No confusion. Just a deliberate extension of conviction.

The real unlock: the carry stack

This is the part most people underestimate.

By layering an SPV on top of the fund, you create what insiders call carry stacking:

• Fund carry: Your standard 20%, net of the entire portfolio (including losses)

• SPV carry: A clean 20% on a single, de-risked winner

Because SPVs are deal-specific, their carry isn’t diluted by low performing investments elsewhere in the fund.

For high-performing GPs, a single SPV can rival, or exceed, total fund carry.

That’s how personal upside compounds.

Who actually shows up: the LP hierarchy

Speed matters. To close a sidecar quickly, you need to know who has the least contraints to investing more capital.

The LPs who typically lean in:

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