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Syllabus: how to launch, manage, and invest a VC fund

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.  Most of my research is also relevant to private equity. I thought it would be helpful to compile my past articles in one place.  I break the process down into 10 steps:

1) Launch.  The first issues to think about are org chart, incorporation, financial structure, and so on.  See Checklist for Launching a New Venture Capital Fund.  Just as with any company, the most important driver of success is the team; see “How to Negotiate a Partner Role at a Venture Capital or Private Equity Firm“.  

Another critical design consideration is your tech stack.  HOF Capital has stitched together its workflow across Google Suite, Slack, Airtable, Asana, Copper, and some other tools (leveraging Zapier for basic 3rd party integration, in addition to custom development for certain other integrations).  For example, HOF Capital created a pipeline management tool that automatically adds deals along with relevant information (such as attachments received) to the funnel.  This tool standardizes and automates the process of collecting inbound deal flow. It seamlessly creates a deal folder (company name) in Google Drive. On Copper (HOF’s CRM), a due date of two business days is automatically set for the team to review the opportunity.  HOF also has created a proprietary tool, Oasys, which programmatically identifies very high-caliber technical teams. See How Private Equity and Venture Capital Investors Are Eating Their Own Dogfood.  

2) Marketing.   See How Private Equity and VC Investors Are Using Social Media.

3) Raise capital.  See Fundraising Hacks for Venture Capital and Private Equity Funds and my book, The Virtual Handshake: Opening Doors and Closing Deals Online.

4) Originate investments.  See Where Are the Deals?!: Best Practices of Private Equity and Venture Capital Funds in Originating Investment Opportunities.

5) Manage deal flow.  See my summary on how lead investors think about building out their syndicate.   

6) Due diligence.  See How to Judge Investment Pitches.

7) Negotiate transaction.  See best practices in building financial models, a template financial model, and valuing startup employee options.

8) Monitor and report investments.  See for example Totem, a spinoff of ff Venture Capital (my prior firm). We also use Carta, which specializes in cap table management and has just launched a fund administration service which we have transitioned to.

9) Accelerate portfolio company value.  See Beyond the Money: Best Practices of Venture Capitalists in Helping Early-Stage Companies Create Value and It’s the People: Improving Private Equity Portfolio Company Valuations by Working with Operating Executives .

10) Time, market, and exit investment.    See my overview of sales technology tools useful for B2B sales.

If you have thoughts on additional topics I should cover, please contact me.  

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