VCs are supposed to be patient money. What if they need cash now?

Pipe, which started out helping venture-backed SaaS companies turn future revenues into capital, is now helping investors too.

Harry Hurst, CEO of Pipe

Pipe co-CEO Harry Hurst has a deal for VCs.

Photo: Pipe

Pipe built a $2 billion business by turning companies' ARR into cash advances with the promise of repayment down the line from a growing stream of customer payments. But in a deal with AngelList, Pipe is targeting a new kind of business: venture firms.

While venture firms don't have the same notion of "revenue" that you'd see at a software startup, venture firms do get management fees, paid by their LPs over time, to cover the cost of the firm's operations. Now Pipe is giving general partners the chance to take more of those management fees upfront.

"For a GP that draws a management fee in cash over a number of years, Pipe provides a way for them to access that capital upfront for a number of use cases, for example, but not limited to, diversifying their personal investments into spaces outside of their fund's investment thesis, using the capital for a down payment on a house and investing into operating expenses like staffing to scale up for the next fund," Pipe co-CEO Harry Hurst wrote in an email to Protocol.

Venture funds typically operate under a "2 and 20" fee structure where firms receive 2% of the assets under management as an operations fee and 20% of the profits on exits. For larger funds or well-established firms with multiple funds, that 2% management fee can be plenty of money. But smaller funds and emerging managers have had to get creative on how to get more funding upfront to cover the cost of launching operations.

Some smaller funds, for example, charge 3% fees and front-load fees to offset initial costs. In a much more unconventional path, both Backstage Capital and Earnest Capital conducted crowdfunding campaigns to help raise money for operations in exchange for future profits.

The Pipe-AngelList deal will provide venture funds with another option: GPs can pay a small fee to Pipe and get up to four years of management fees in advance. It's not a loan and there's no interest, according to AngelList. (Revenue advances or merchant cash advances, as products like this are known, are generally viewed as the sale of future revenue and hence a commercial transaction versus a more heavily regulated loan.)

For Pipe, it's a push beyond its original market of SaaS companies. While Pipe focused on that market at first, Hurst said that more than 50% of its business now has evolved into other categories: direct-to-consumer companies, streaming services and even service-based businesses like pest control and gyms. While venture fees may not be a traditional "revenue" stream, for Pipe, it's another flow of cash it can tap in to.


An IPO may soon be in Notion’s future

Notion COO Akshay Kothari says there’s room to grow, aided by a new CFO who knows how to take a company public.

Notion has hired its first chief financial officer: Rama Katkar.

Photo: Courtesy of Notion

It’s been a year since Notion’s triumphant $275 million funding round and $10 billion valuation. Since then the landscape for productivity startups trying to make it on their own has completely changed, especially for those pandemic darlings that flourished in the all-remote world.

As recession looms, companies looking to cut costs are less likely to spend money on tools outside of their Microsoft or Google workplace bundles. Enterprise platforms are bulking up and it could spell trouble for the productivity startups trying to unseat them. But Notion COO Akshay Kothari says the company is still aiming to build the next Microsoft, not be the next Microsoft. And in a move signaling a new chapter of maturity, Notion has hired its first chief financial officer: Rama Katkar, Instacart’s former VP of finance.

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Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at

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