LetsVenture: LetsVenture’s proposed changes to investment structure draw criticism from investors
Early-stage investment platform LetsVenture has amended their private placement memorandum (PPM) arrangement and added an exit fee minimum of Rs 25,000 to 3% of exit value per syndicate for every investor.
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The move has attracted criticism from certain limited partners (LPs) and investors part of the syndicate platform.
On February 13, LetsVenture notified investors of the changes in the PPM arrangement and asked for their consent through a Google form. The platform also added that in case of no response, it will be ‘deemed consent’, which has further invited the ire of LPs.
To add an exit fee means that additional charges will be levied by the platform from the returns and profit on investment made by every investor.
“They asked for consent for this amendment to their PPM via Google form. So far so good, it’s perfectly reasonable for a manager to ask their investors for a change to terms. However, they said that consent would be “deemed” from those who do not respond. i.e. silence = consent,” tweeted Gautam Shewakramani, one of the LPs on LetsVenture and cofounder and partner at Inuka Capital.
“I’m no expert with SEBI AIF rules, but my guess is that it also probably violates them – silence cannot be deemed as consent to change terms for a regulated investment scheme,” added Shewakramani.
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Shewakramani declined to comment when ET directly reached out. In a post on professional networking website LinkedIn, LetsVenture founder Shanti Mohan accepted the changes in the PPM and said that the syndicate-led investment platform does not charge any management fee every year to cover the costs of the fund for five years.
“In full transparency, we charge an Rs 25,000 onboarding fee (one time) and an investment fee of 1-2% with a carry of 3-5% on exit. We don’t charge a management fee every year, to cover the costs of the fund over 5 years. (While my PPM allows an onboarding fee Rs 50,000, with a transaction fee of up to 5%),” Mohan said in defense to Shewakramani’s tweets.
Responding to the criticism on exit fee, Shanti countered that angel investors did not object to the platform earlier when it reduced its carry to help increase their wealth creation.
“We were the first in the ecosystem to reduce the carry from 20% to 10% (this is capped) in the interest of the average angel investor on the platform and AIF. I didn’t see any rallying behind this by anyone (certainly not any lead investors) when we believed this would be a great way to ensure that wealth creation for the angel investors is protected,” said Shanti.
Carry interest is a percentage of the fund’s profits (made through investing) that a fund manager receives as compensation.
At present, LetsVenture has 4,500 investors who have invested across 900 schemes.
Early-stage investment platform LetsVenture has amended their private placement memorandum (PPM) arrangement and added an exit fee minimum of Rs 25,000 to 3% of exit value per syndicate for every investor.
![]()
The move has attracted criticism from certain limited partners (LPs) and investors part of the syndicate platform.
On February 13, LetsVenture notified investors of the changes in the PPM arrangement and asked for their consent through a Google form. The platform also added that in case of no response, it will be ‘deemed consent’, which has further invited the ire of LPs.
To add an exit fee means that additional charges will be levied by the platform from the returns and profit on investment made by every investor.
“They asked for consent for this amendment to their PPM via Google form. So far so good, it’s perfectly reasonable for a manager to ask their investors for a change to terms. However, they said that consent would be “deemed” from those who do not respond. i.e. silence = consent,” tweeted Gautam Shewakramani, one of the LPs on LetsVenture and cofounder and partner at Inuka Capital.
“I’m no expert with SEBI AIF rules, but my guess is that it also probably violates them – silence cannot be deemed as consent to change terms for a regulated investment scheme,” added Shewakramani.
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Shewakramani declined to comment when ET directly reached out. In a post on professional networking website LinkedIn, LetsVenture founder Shanti Mohan accepted the changes in the PPM and said that the syndicate-led investment platform does not charge any management fee every year to cover the costs of the fund for five years.
“In full transparency, we charge an Rs 25,000 onboarding fee (one time) and an investment fee of 1-2% with a carry of 3-5% on exit. We don’t charge a management fee every year, to cover the costs of the fund over 5 years. (While my PPM allows an onboarding fee Rs 50,000, with a transaction fee of up to 5%),” Mohan said in defense to Shewakramani’s tweets.
Responding to the criticism on exit fee, Shanti countered that angel investors did not object to the platform earlier when it reduced its carry to help increase their wealth creation.
“We were the first in the ecosystem to reduce the carry from 20% to 10% (this is capped) in the interest of the average angel investor on the platform and AIF. I didn’t see any rallying behind this by anyone (certainly not any lead investors) when we believed this would be a great way to ensure that wealth creation for the angel investors is protected,” said Shanti.
Carry interest is a percentage of the fund’s profits (made through investing) that a fund manager receives as compensation.
At present, LetsVenture has 4,500 investors who have invested across 900 schemes.
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