A fund of funds (FoF) is an investment vehicle that invests its capital into other venture funds rather than directly into startups. Sometimes called a "feeder fund" in specific structures, it can also invest in PE funds, hedge funds, etc., providing institutional access and diversification benefits to LPs while adding a layer of fees ("fees on fees") on top of the underlying fund economics. It is a meaningful LP category for venture funds, particularly for smaller institutional and individual LPs who want diversified venture exposure without the access constraints or due-diligence burden of investing directly in multiple funds.
The structural mechanics: a FoF raises capital from its own LPs (institutional investors, family of...