Create and set up a Fund

The Covalent platform allows you to create and manage funds to efficiently track portfolio companies and monitor important financial metrics. To get started, navigate to the Funds tab and click the + New Fund button.

You'll be taken to the Let's Build a Fund page, where you'll begin by naming your fund.

After naming your fund, you'll be prompted to enter key details that define its lifecycle and financial structure.

This section is where you'll define the fund's timeline.

• Vintage Year: The year the fund was created.

• Expected life of Fund (years): The total expected lifecycle of the fund.

• Deployment Period (years): The period during which the fund will actively deploy capital into investments.

Here, you'll set the management fees charged during and after the deployment period. Management fees are currently auto-calculated by our system.

• Management Fee: Deployment Period (%): The percentage charged on committed capital as a management fee during the deployment period. The management fee per year is calculated by multiplying this percentage by the total amount committed by LPs for the fund.

• Management Fee: Post-Deployment Period (%): The percentage charged on committed capital after the deployment period has ended. This is based on the agreement between your firm and your Limited Partners (LPs).

Once these details are entered, your fund will be created, and you'll be taken to its dashboard.

To fully set up your fund, you can configure additional financial and strategic parameters.

Dilution Assumptions

Navigate to the Details tab of your new fund and scroll to the bottom to find the Dilution Assumptions section. Here, you can set the expected dilution percentages for different funding rounds. These assumptions, which have industry-standard defaults, will be applied across all investments in this fund to help estimate dilution when detailed data isn't available.

Now, go to the Inflows tab to document all capital inflows into your fund. These records, which can come from LPs or recycled capital, are essential for accurately calculating your fund's Internal Rate of Return (IRR) and other key metrics.

You can get this data from your internal records or from platforms like Carta.

You can log inflows in one of two ways:

• Granular Entry (if details are available): Record each transaction individually, including the amount, date, and a descriptive title.

• Example: Title: Capital Inflow from John Paul | Amount: $300,000 | Date: 10/12/1900

• Lump-Sum Entry (if details are limited): We have discovered that many firms may not have granular details for every inflow. If exact inflow dates per LP aren't available, you can log the total capital received per capital call as a single entry. For the date, you can use the closing date of the capital call, as this is when all amounts were expected to have been paid in.

  • Example: Title: Total Paid In from March 2025 Capital Calls | Amount: $1,000,000 | Date: 10/12/2020

Both methods are supported—use whichever best reflects your available data.

• Total Paid-In by Limited Partner: This is the total sum of all capital contributions from LPs as recorded on the Limited Partners page. You can update this by adding or editing LP commitments there. To learn how, please check out our Adding Limited Partners Capital Commitments and Contributions article.

• Total Breakdown Amount: This card reflects the total capital allocation you've entered in this section.

We use color indicators to help you match these values:

• Green: The breakdown amount exactly matches the total Paid-In Capital.

• Orange: The breakdown amount is less than the Paid-In Capital.

• Red: The breakdown amount is greater than the Paid-In Capital.

It's important to ensure these two values match to avoid any discrepancies in your fund's financial metrics.

Next, move to the Outflows tab to enter all transactional outflows from the fund. This currently includes fund expenses and distributions to LPs.

1. Fund Expenses

Log fund-related expenses incurred throughout the life of the fund. These should exclude management fees and focus on operational or transaction-related costs (e.g., legal, diligence, admin). These details can be found in internal records or on platforms like Carta if they are properly tracked.

To log an expense, you must provide transaction details individually, including the amount, date, and a descriptive title.

Here, you'll record lump sum distributions made to Limited Partners from the exits, returns, or other proceeds of this fund. These entries help track capital returned to LPs over time.

You'll need to enter the amount, date, and a descriptive title for each distribution.

Once these details are entered, your fund has been fully set up. You can now proceed to add investments to your fund. Read our How to Add Investments to a Fund article to learn more.