Fund of Funds

Also called FoF

A fund that invests in other venture funds rather than directly in startups, giving its own investors diversified exposure to VC as an asset class.

Why it matters

Fund of funds are a major source of LP money for VCs, especially emerging managers. They rarely matter to founders directly, but they are part of why the capital flows the way it does.

For example

A pension fund invests 100 crore into a fund of funds, which spreads it across a dozen venture funds rather than picking startups itself.

Related terms

Limited Partner Venture Capital Micro VC

Go deeper

See how founders actually handle this on Raising your first round, part of the Starting Up hub.

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