Item 5. Fees and Compensation
General Fee Information
BoldRose is generally compensated for its advisory services to the Clients based on a percentage
of assets under management and performance-based amounts. The fees applicable to each Client
are set forth in its offering documents. A brief summary of such fees is provided below.
Management & Performance Fees
Some of the Clients pay to BoldRose an annual “Management Fee” of up to 2.5% of the aggregate
capital commitments of Investors who are not related persons of BoldRose or the General Partner.
Following the investment period of Rose Capital Fund I, LP, the annual Management Fee is
adjusted to 2.5% of invested capital. Each Client’s offering documents should be reviewed to
determine the exact management fees. Any new advisory Clients may be subject to Management
Fees and performance-based fees that differ from what is summarized in this Brochure.
The General Partner and other special purpose affiliates of BoldRose will generally also receive
performance-based fees or “carried interest” allocations (“Performance Fees”) of up to 30% with
respect to each Investor for the management of certain of the Clients based on realized profits and
losses allocated to such Investor. The Performance Fees in some of the Clients are also subject to
a preferred return, a catch-up on the preferred return, and a clawback if aggregate distributions do
not exceed a specified hurdle.
BoldRose and/or its affiliates, in their sole discretion, may elect to reduce or waive the
Management Fees or Performance Fees. BoldRose has waived or reduced Management Fees and
Performance Fees as to certain Investors and may in the future agree with an Investor orprospective
Investor to waive, reduce, or otherwise alter the Management Fees and Performance Fees.
Management Fees and Performance Fees are described in greater detail in the offering documents
of the Clients.
Expenses
BoldRose pays all normal operating expenses incidental to the provision of the day-to-day
administrative services to its Clients, including its own overhead, such as rent, partner / employee
salaries, and internal financial reporting and tax preparation. To the extent permissible, third-party
costs are charged to each Client and its Portfolio Companies.
Each Client will generally bear its own organization and operating expenses including, without
limitation: (i) organization and syndication costs; (ii) legal, accounting, administrative, audit,
custodial, consulting and other professional fees; (iii) banking, brokerage, due diligence, travel
related expense, broken-deal, registration, finders, depositary and similar fees; (iv) costs incurred
in acquiring, holding and selling portfolio securities, including taxes imposed on a Client as an
entity; (v) insurance premiums, indemnifications, and litigation costs; (vi) costs of financial
statements, tax returns and other reports; (vii) costs of Client, General Partner and BoldRose
compliance with applicable securities laws and registration or licensing laws arising from the
management of, or provision of advice to, a Client; and (viii) costs of Client meetings.
The costs and fees paid by each Client may be substantial. For example, BoldRose may engage
third parties on behalf of a Client to identify/source investment opportunities, perform
analysis/diligence in respect of potential investments, technologies, markets, or other issues, or
provide Portfolio Companies with advice, guidance, or other benefits. The apportionment of
expenses inherently creates conflicts of interest between BoldRose and a Client. BoldRose may,
in its sole discretion, bear any of a Client’s expenses described above; provided that, if BoldRose
does pay any such expenses, it will not be required to continue to pay such expenses and may
thereafter cause the Clients to pay such expenses.
To the extent that expenses are incurred in relation to an investment, or prospective investment, in
which one or more Clients invested or participated, BoldRose will allocate such expenses among
such Clients. Such expense allocations will generally be pro rata based on the Client’s cost basis
(or expected cost basis) of the investment relative to the cost basis (or expected cost basis) of the
investment held by each such Client. With respect to expenses other than those incurred in relation
to investments or prospective investments, expenses that are common to multiple Clients will be
allocated among the Clients during the calendar quarter in which such expenses are incurred on
such basis as BoldRose determines in good faith to be equitable and appropriate.
Each Client may incur expenses in connection with a potential investment that is expected to be
made by that Client along with one or more co-investors. As a general matter, a Client will be
obligated to pay all of its expenses in connection with an investment opportunity that is considered
by a Client, even if the investment is not consummated, and even if potential co-investors do not
agree to pay any share of such expenses.
With respect to certain of the Clients, BoldRose, its affiliates, and employees thereof, per the
Clients’ governing documents, will receive supplemental fees charged to the Portfolio Companies
as compensation for a broad range of services performed by or for the benefit of one or more
Portfolio Companies (“Supplemental Fees”). Such fees are charged in addition to the Management
Fee and any reimbursement for out-of-pocket expenses received by BoldRose its affiliates, and
employees thereof. Notwithstanding anything contained within the governing documents to the
contrary, BoldRose, its affiliates, and employees thereof, will collect and retain one hundred
percent (100%) of all Supplemental Fees from the Portfolio Companies for services they have
rendered to the Portfolio Companies. Further, such Supplemental Fees will not offset any portion
of the Management Fee charged or borne by the Clients or Investors.
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