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Growing a VC

Over the past decade, I’ve (somewhat accidentally) put together on this blog a syllabus on how to launch, manage, and invest a VC fund.  Almost all my research is also relevant to private equity.

I’ll start with my series on building your career in private equity/VC:

For building your firm, I suggest you walk through the 14 steps below:

1) Determine your strategy. 

Should you be a momentum or a value investor?

Should you invest in follow-ons, and if so, how?

Does Your VC have an Investment Thesis, or a Hypothesis?

Should your fund use Revenue-Based Investing or traditional equity VC?

Flexible VC, a New Model for Companies Targeting Profitability

What Are the “Jobs To Be Done” of an Investment Manager? What jobs are you doing for LPs?

– How do you differentiate? See How to get superior returns in VC

– What geographies will you focus on?  See Why venture capitalists are investing in international startups.

– What is your culture?  See Design your company culture like the world’s largest hedge fund.

– What is your strategy for working with universities?

– What is your diversity strategy?  See The iconic VC-Backed founders are all White & Asian men. So why invest in diversity? and Why are venture capitalists (76% white men) ignoring the future?

Exploring Evergreen Funds with a VC Investor Who Raised One (written by another investor)

ESG in Venture Capital: Interview with Blue Future Partners (VC Fund of Funds)

2) Assemble the team.

Should you co-found a company with your friend? And how do you split the equity?

How to Negotiate a Partner Role at a Venture Capital Firm, or Recruit a Partner

Venture Capital compensation data and recruiters list

3) Launch.

You will next have to address the operational issues: org chart, incorporation, financial structure, and so on.  See Checklist for Launching a New Venture Capital Fund

4) Design your tech stack.  

What is the Best CRM and Marketing Tech Platform for a New Private Equity/Venture Capital Fund?

How Private Equity and Venture Capital Investors Are Eating Their Own Dogfood: Using technology as a competitive weapon.

5) Market.  

An Investor’s Personal Social Media Tech Stack: In the future, everyone will be famous for 15 followers

How Private Equity and VC Investors Are Using Social Media

6) Raise capital.  

15 Steps to Fundraising for Your New Venture Capital or Private Equity Fund

Fundraising Hacks for Venture Capital and Private Equity Funds

5 Innovative Fundraising Methods for Emerging Venture Capital and Private Equity Funds

Should you give an anchor investor a stake in your fund’s management company?

The Pros and Cons of Hiring a Placement Agent, for Small Emerging Investment Managers

How do you attract family offices and other large investors to your direct investing platform?

– my book, The Virtual Handshake: Opening Doors and Closing Deals Online.

7) Originate investments.  

Where Are the Deals?!: Best Practices of Private Equity and Venture Capital Funds in Originating Investment Opportunities

How to identify technology trends for macro investors

The Next Great Entrepreneurial Opportunity: How to Identify Market White Space (VIDEO)

How to Find the Right Online Communities

8) Manage deal flow.  

How lead investors build out their syndicate.   

9) Due diligence.  

How to Judge Investment Pitches.

10) Negotiate transaction. 

Best practices in building financial models

Template financial model

Valuing startup employee options

11) Monitor and report investments.

See How to run your company based on metrics: what, why, how, who, and when.  You might be able to use Totem, a VC operating system which we spun out of ff Venture Capital. We also use Carta, which specializes in cap table management and has launched a fund administration service .

12) Accelerate portfolio company value.  

I’ve posted some essays focused on the investors’ point of view:

Launching a Portfolio Acceleration Platform at a Venture Capital or Private Equity Fund

Beyond the Money: Best Practices of Venture Capitalists in Helping Early-Stage Companies Create Value

It’s the People: Improving Private Equity Portfolio Company Valuations by Working with Operating Executives 

And also a lot of material from the point of view of a startup management team:

Shaking the Money Tree: Social Media and Other Innovative Tools for Raising Capital (VIDEO)
Recruiting Hacks: How to Woo and Win the High Performers (VIDEO)
How to Manage Your Board Meetings
Financial Modeling for Entrepreneurs

13) Time, market, and exit investment.  

See my overview of sales technology tools useful for B2B sales.

14) Grow the firm.

How to scale a VC (or private equity) fund.