Subject: Re: GS agreement thoughts
From: "William Lee" <[email-masked]>
To: "John DeLoche" <[email-masked]>
Cc: "Devon Archer" <[email-masked]>, "Hunter Biden" <[email-masked]>, "Neil Callahan" <[email-masked]>, "Rob Walker" <[email-masked]>, "Eric Schwerin" <[email-masked]>
Date: Thu, 20 Mar 2014 19:40:21 -0700

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 <[email-masked]> 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 <[email-masked]> 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 <[email-masked]> 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
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