Item 5. Fees and Compensation
As compensation for investment advisory services rendered to the Funds, the Adviser will be
entitled to receive an advisory fee (the “Advisory Fee”), payable quarterly in advance as of the
first day of each calendar quarter. The Advisory Fee will be debited from the capital accounts of
the Main Fund, based on the capital account balance of each investor (including its “Special
Investment Sub-Account” 1 balance, with Special Investments valued at the lower of investment
cost or fair value for such purpose) in the Main Fund as of such date (after taking into account any
credits to or debits from the capital account on such date, including in respect of any Special
Investment Sub-Account, or any contributions, distributions or withdrawals, but before giving
effect to any debits from such capital account that relate to the Advisory Fee to be paid on such
date) will be debited against the investors’ capital accounts. A prorated Advisory Fee will be
assessed on any capital contributions accepted as of any date other than the first business day of a
calendar quarter. If all or any portion of the capital account of an investor is withdrawn as of a
date that is not the end of a calendar quarter, then the Adviser will rebate to such investor a portion
of the Advisory Fee, with respect to such portion of that capital account that is withdrawn, based
on the number of days remaining in the calendar quarter.
The Adviser from time to time, in its sole discretion, waives all or a portion of the Advisory Fee
with respect to certain co-investment vehicles or investors, including investors who are or were
related persons of the General Partner or the Adviser and/or employees or principals of Sequoia
Capital. 2 Prior to the date on which such Advisory Fee would otherwise be payable, the Adviser
may also reduce any portion of the Advisory Fee payable with respect to an investor on such terms
as the Adviser may determine in its sole discretion. The fee structures described above may be
modified from time to time. Fees may differ among investors in the Funds.
If the Main Fund invests directly in a fund, or other collective investment vehicle, managed or
advised by an affiliate of the Adviser, or affiliate of Sequoia Capital (a “Sequoia Affiliated Fund”),
then (i) the General Partner will waive all or part of that portion of the Advisory Fee that would be
payable with respect to the portion of the Main Fund invested in such Sequoia Affiliated Fund
and/or (ii) such Sequoia Affiliated Fund will waive all or part of the management fee that would
be payable by the Main Fund with respect to its investment in such Sequoia Affiliated Fund, so
that there will be no duplication of such fees.
Except as set forth below, expenses of the Funds will not include the normal operating expenses
of the Adviser and its equity holders (including compensation and benefits provided to employees
Special investments are securities that the General Partner believes bear a significant risk of illiquidity, lack a readily
ascertainable market value or should be held until the resolution of a special event or circumstance (“Special
Investments”). Each Special Investment will be held in a separate “side pocket” at the Main Fund (a “Special
Investment Account”). The General Partner will maintain a separate “side pocket” account for each Special Investment
as a sub-account of the capital account that reflects the entitlement of each partner to allocations and distributions with
respect to any such special investment (a “Special Investment Sub-Account”).
The Adviser is associated with a collection of private investment funds, “general partner” entities and “back office”
entities that generally utilize the “Sequoia Capital” brand name and often are referred to colloquially as “Sequoia
Capital.” Sequoia Capital is known primarily as a venture capital firm, but its activities extend beyond traditional
notions of venture capital to include growth investing. The Adviser generally operates with independent investment
authority from other Sequoia Capital entities.
of the Adviser; rent, administrative, and other overhead charges and costs of any office maintained
by the Adviser; and travel, lodging and related costs incurred by its employees).
Expenses to be borne by the respective Funds will include the following costs and expenses:
(i) costs and expenses incidental to the Funds’ formation, ongoing operation, and their dissolution,
winding-up, or termination; (ii) fees, costs, and expenses of offering, selling, transferring or
withdrawing interests in the Funds and communicating with investors (including, without
limitation, the costs of preparing, printing and distributing offering materials, subscription
materials, reports and notices, tax returns, tax estimates, legal and accounting fees and expenses,
and governmental and self-regulatory agency filing fees, costs, and expenses), to the extent not
borne by such investor or transferee (as applicable); (iii) costs of financial statements and other
reports to the investors (including the cost of the investor databases) as well as cost of all
governmental returns, reports and other filings, including reimbursements of any fees and expenses
to advisers, service providers and other third parties; (iv) fees, costs, and expenses of the Funds,
the General Partner and the Adviser associated with compliance and regulatory filings of the Funds
or the General Partner or its affiliates, including, but not limited to, (A) section 13 or 16 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), (B) Regulation D under the
Securities Act, (C) non-U.S. regulatory filings related to position reporting, (D) the Internal
Revenue Code of 1986, as amended (the “Code”), including sections 1471 to 1474 of the Code,
including Global Intermediary Identification Numbers and FATCA, (E) the Cayman Islands
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