Hi all, Again, new to the industry... so this may be a bit of a newb question. I've been informed that there may be institutional funds willing to "invest" in my fund, but not as a direct investment. They're looking at a first loss arrangement: I put up $2 million, and they would put up $20 million. Any losses are my responsibility, and gains are split 50/50. (Any numbers described here are just for illustration purposes, not an actual offer.) After a certain amount of time (1-2 years), this converts into an actual investment as a LP. They explained it as, an institutional fund may not trust a small-time manager with <$5mm AUM and 1.5 years of operating history, and this is a way to really prove myself. When I first heard this... my thought was, isn't this just 10x1 leverage? Except I'm only getting 50% of the profits, rather than 100%? Not interested. Then I gave it some more thought... as many know, it's hard growing a fund from a few million to >$10 million through new investment. High net worth individuals aren't that easy to find, and institutional investors really aren't interested in funds in this size. This might be worth the price just to super-charge growth to the next stage. So, I'm interested in thoughts from all: - Pros? Cons? - what are good numbers to aim for? Is 1x10 leverage factor "good"? Is a 50/50 split good? - It occurs to me I should insist on a lock-up on the direct investment whenever it occurs... yes?