Fair questions. There would have to be a management fee but since it wouldn’t be structured as a “fund” it would just be operational costs. If the initial fund raised was large enough it would be sustainable at 1% or lower.
The only way I envision it working is if it’s inbound deals so it’s really marketing driven, not a ton of people out scoping deals and pitching entrepreneurs and accelerators. The goal is to have minimal staffing requirements.
Human beings would have to be involved for the pro-rata component and like any fund, not doubling down could have adverse consequences, but only on the ones that weren’t performing I think, so in that way no different.
This is all just theoretical so I haven’t really thought through some of the details that might derail the concept.