Item 5. Fees & Compensation
The amount and nature of fees paid for access to Venn vary based on a number of factors, including
the commercial terms of the Client’s subscription and certain features and functionality selected
by the Client (e.g., number of users, content, data, assumptions and research, length of term,
branding, customer support and usage limits), as well as general business considerations regarding,
for example, the size and nature of the relationship that the Adviser and/or a Two Sigma Affiliate
has established or is seeking to establish with such Client, including potential referral, sponsorship
and/or co-marketing arrangements (see Client Referrals & Other Compensation below).
While the Adviser does maintain internal pricing guidelines, the Adviser has not established a
formal, publicly available standardized fee schedule for Venn. As the Adviser releases new
features and functionalities, Clients should generally expect to pay additional fees for access to
such new features and functionalities. For example, some Venn features such as Report Lab, a
report- and proposal-generating tool, and Private Asset Lab, a module for the analysis of non-
publicly traded securities, are typically available to Clients only at additional cost. Fees are
generally paid in advance, with the frequency of such payments agreed with each such Client at
the time of contract. For the avoidance of doubt, the amount and nature of fees are determined on
a case-by-case basis, and there should be no expectation that the Adviser will necessarily charge
any two Clients the same amount (or require the same payment terms) for the same or similar
services.
Fees paid by Clients for access to Venn are often negotiable and will be as agreed with each Client.
In some cases, the Adviser will, in its sole discretion, not charge a fee to a particular Client, charge
a discounted fee, begin charging a fee to a Client following a trial period, or otherwise agree to a
variety of other fee arrangements with Clients. For example, the Adviser could agree to charge a
fee based on the value of assets a Client analyzes using Venn. In some cases, the Adviser has
agreed to a fee that is determined, adjusted or waived (in whole or in part) based upon referrals or
other benefits the Client (or a sponsoring entity) provides to the Adviser or its affiliates. In other
cases, the Adviser has agreed to accept non-cash compensation, such as stock options in a Client’s
company.
Certain Clients receive access to Venn (as a whole or to certain features or functionalities) without
paying a fee to the Adviser given such Client's relationship with TSI, TSA and potentially other
Two Sigma Affiliates or with unaffiliated third parties, including arrangements where the Two
Sigma Affiliate or an unaffiliated third party pays for a bulk number of licenses or group-wide
access to Venn. (See Client Referrals & Other Compensation below.) To the extent assessed to
any Client, fees for Venn cover a stated subscription period. Clients generally elect to be billed
and pay in advance for access to Venn. Subject to and in accordance with applicable contractual
and related documentation for Venn (“Platform Documentation”), Clients who duly terminate a
paid subscription early in accordance with their contract terms can obtain refunds or adjustments
for a partial period; however, fees for Venn generally provide and cover access for an entire period.
In many cases, unless otherwise agreed to with the Client, subscriptions are subject to auto-renewal
and generally a specific notice period is required to terminate prior to the renewal date to avoid
auto-renewal.
The Adviser receives a fee from each of TSA and TSI for making Venn available to certain Clients,
including Clients who have invested in TS Products. Such fees are borne by TSA or TSI (in whole
or in part), as applicable, and not by Clients or by clients of TSA or TSI. Such fees depend in part
on the total amount of assets under management of such investors in TS Products (as defined
below). Therefore, increased investment into such TS Products will increase such amount of assets
under management, which creates a conflict of interest for the Adviser in connection with its
Clients and their investments in TS Products. Please see elsewhere in this Form ADV brochure,
including in Items 6, 8, 10, and 11, for important disclosures on risks and conflicts of interest.
The Adviser has policies and procedures in place that it believes are reasonably designed to
mitigate the risk that analytics on Venn operate on a non-objective basis. Clients should be aware,
however, that although the Adviser believes such policies and procedures reduce the impact of
such conflicts of interest, no policies or procedures can completely eliminate conflicts of interest.
The Adviser will receive similar fees from other Two Sigma Affiliates if it enters into similar
arrangements with them, as applicable. For certain Adviser personnel, compensation is expected
to include bonuses based on sales, the success of Venn or other services of the Adviser, and/or on
the overall financial performance of the Adviser and other Two Sigma Affiliates.
If, in connection with the Adviser’s services (including Venn), a Client transacts in any investment,
including an investment in a TS Product (which in all cases is at the Client's own election), the
Client should be aware that the Client will bear expenses in connection with such investment,
including, but not limited to: any applicable investment management fees and/or performance-
based compensation, custodian fees, mutual fund expenses, brokerage commissions, transaction
costs and other fees, charges, payments and expenses and other costs of trading, acquiring,
monitoring, or disposing of any investments. Clients should consult the terms of the offering
memorandum, investment management agreement, sub-advisory agreement, prospectus and
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