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Venture capital fund reserves are the portions of capital that venture capitalists hold back from initial investments to support future funding rounds of their portfolio companies. It's a way to ensure that they can continue to support their portfolio companies through their growth stages.
When a venture capitalist invests in a startup, they don't usually invest all their committed capital upfront. They invest a portion of it and reserve the rest for follow-on investments. These reserves are used to support portfolio companies through future funding rounds, to protect their stake from being diluted, and to provide additional support if the company hits a rough patch. The amount of reserve varies, but it's an important part of venture capital fund management.
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