Fundless sponsor

Tailored industry coverage

 

What is a fundless sponsor?

A fundless sponsor operates like a private equity or venture capital firm, except that they don’t manage a fund, they solicit investors for each specific opportunity. Since fundless sponsors may have a unique set of investors for each investment, there can be greater risk of investor litigation due to lack of diversification.   

Capacity

$5M maximum limit.

Coverage & Benefits

Primary coverage:

  • Includes omnibus coverage for investment vehicles create by the firm, as well as built-in coverage for inquiries of insured persons 
  • Provided for crisis management expenses and extradition costs.

Secondary coverage available for:

  • Cyber/Privacy to protect against data breaches and theft of sensitive information, 
  • Employment Practices Liability (EPL) to protect the company from lawsuits brought by employees,
  • Fiduciary, covers the liabilities of those responsible for managing employee benefit plans, and
  • Employed Lawyers for in-house attorneys. 
FAQs
  • Do you have the ability to offer cyber coverage? 

    Cyber can be included on this policy as a separate coverage part.
     

  • I already buy D&O, why do I need to buy E&O? 

    D&O coverage generally excludes claims brought by customers or regulators alleging the failure to provide professional services.  E&O is designed to provide that coverage.
     

  • Does your policy respond to an informal regulatory investigation?  

    While informal investigations do not traditionally meet the definition of claim, our policy can provide defense coverage for insured persons to respond to informal regulatory investigations.
     

  • Is there coverage provided for insured persons serving on the Board of Directors of a portfolio company? 

    There is Side-A coverage for such persons in excess of the portfolio company’s D&O insurance and ability to indemnify the insured person.
     

  • This firm does not have a fund and instead invests through different LLCs. How does your policy address this? 

    We treat the LLC investment vehicles as though they are their own single purpose fund and we have language to cover newly created LLCs automatically during the policy period.

Related products

Package Fundless sponsor coverage with the following products: Cyber and Management Liability.

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Claims scenarios 

Not sure what risks our product covers? We’ve brought some scenarios to life.

Fundless sponsor

A fundless sponsor secured convertible debt financing for one of its investments. When the lender converted the debt to equity prior to the sale of the company, the investors sued the fundless sponsor manager for negotiating financing that diluted their investment stakes. 

Fundless sponsor

A fundless sponsor secured convertible debt financing for one of its investments. When the lender converted the debt to equity prior to the sale of the company, the investors sued the fundless sponsor manager for negotiating financing that diluted their investment stakes.