POLAND Law and Practice Contributed by: Rafał Celej, Arkadiusz Klejnowski and Karolina Piotrowska-Andryszczyk, Kondracki Celej
Fund managers are typically entitled to: • an annual management fee, ranging from 2% to 2.5% of committed capital, used to cover operating and team costs; and • carried interest, commonly set at 20%, pay - able upon exceeding a predefined hurdle rate (usually 6–8% IRR), following a capital return waterfall. Fund managers (or the general partner) are also expected to make a commitment into the fund, usually between 1% and 3% of the total fund size, to ensure alignment of interests with LPs. Institutional LPs – including entities such as the EIF or PFR Ventures – often view a meaningful commitment as a signal of manager confidence and long-term alignment. Over the past several years, Polish VC funds have increasingly converged with international best practices when it comes to investor protection and governance. Key terms now widely adopt - ed include: (a) investor protection provisions regarding liquidity preferences, claw-back and escrow, removal rights and conflict-of-interest policies; and (b) governance provisions regard - ing reserved matters, reporting and investment committees. 2.3 Fund Regulation VC funds in Poland are primarily governed under the Act on Investment Funds and Management of Alternative Investment Funds and supervised by the KNF. Most VC funds qualify as small ASIs, which man - age assets below the thresholds set out in the EU AIFM Directive. These vehicles are subject to simplified regulatory requirements:
• general partner notification-based registration with the KNF; • limited reporting obligations; and • exemption from the full licensing regime. Funds exceeding the thresholds (EUR100 million with leverage or EUR500 million without) require a full licence. This authorisation must be secured through a formal licensing procedure before the KNF, which involves submitting extensive documentation relating to the fund manager’s structure, governance, risk management, capital adequacy and compliance systems. However, such cases remain rare within the Polish VC eco - system due to the relatively small size of most venture funds and the standard industry practice of operating without leverage. 2.4 Particularities A distinctive feature of the Polish VC ecosystem is the strong involvement and role of the public sector, particularly through fund-of-funds pro - grammes co-ordinated by: • PFR Ventures, the VC arm of the Polish Development Fund (PFR); • NCBR (National Centre for Research and Development), which supports innovation- focused investment initiatives; and • BGK (Polish Development Bank), which co- finances VC activity through guarantee and capital instruments and also operates its own VC fund. Most of the active VC funds in Poland have received capital through public co-investment schemes, typically structured via dedicated pro - grammes such as Bridge VC (NCBR), CVC, Koffi Biznest and Starter (PFR). Public LPs generally provide 50% to 80% of total fund capital, with private capital raised alongside.
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