Fundraising hacks for alternative investment managers: venture, private equity, hedge funds

Historically, the process of winning capital from limited partners has been opaque.  However, in the last few years a few have started to use social media and become more transparent. I’ve collected the best guidelines here. If you have any other resources to add, please contact me.

First, I’ve written a number of essays on fundraising for an investment management firm:

LIMITED PARTNERS’ PERSPECTIVE

Chris Douvos is almost certainly the LP who has been blogging the longest, at SuperLP.com.  (Incidentally, as an indicator of how high the bar is for a GP, he says, “I dove into our fund log from the last couple of quarters and found that the mean IRR (among VCs listing one) was over 36%.”)   Other LP bloggers include Blue Future Partners (BlueFP.com), Lindel Eakman (LDEakman), Trey Hart (LP2LP2VC.com), and Samir Kaji (VentureUnlocked).

Origins is a podcast about Limited Partners, created by VC Notation Capital.  OpenLP.com centralizes other LPs’ perspectives.

At Invesco’s conference on Emerging GPs, one of the highlights was a presentation by Laurie Weir summarizing CALPERS’ selection criteria under their Private Equity Emerging Manager Program Review.  Their Report gives granular detail on what they are looking for — and avoid — in fund managers.

Plexo Capital: The Economic Impact of Coronavirus: What GPs Need to Know

Foundry Ventures: The Hard Questions Venture Capital GPs Need to Be Prepared For

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VCs have to fundraise too: “Inside SuperVenture: the bizarre conference where VCs flock to raise their next fund — and not all succeed.”

Samir Kaji: The Family Office perspective on venture fund allocations

Cambria Capita: Know Your Edge As A VC, Part One: Informational Edge

Sameer Jain, ActiveAllocator.com: Due Diligence Framework for Direct Investing

Denis Tse: Fund Management Craftsmanship: An LP’s Food for Thought for Emerging VC General Partners

Mesh Lakhani on his approach to angel and fund investing

Sapphire Ventures’ Top 10 tips for pitching an LP  

Weathergage’s Annual Meeting

Lindel Eakman on joining Foundry Group

Alex Bangash: “VC is all about access

Top Tier: ‘Straight Talk’ From a Leading LP: How LPs Evaluate New Managers

6 Common Pitfalls VCs Make With LPs

Trusted Insight LP Panel

Who Invests In Investors: Homebrew LP Shares VC Performance Goals, Importance of Diversity & What They Look For In New Funds

Some Advice On “First Calls” With Fund Managers You Might Be Evaluating

Successful Fundraiser’s Philosophy: How Micro VCs Get Off the Ground & Succeed .  Here’s the Deck.

Embracing Emergence: The Newsletter where LPs and Emerging Managers find convergence.

In this segment of the a16z Podcast, three investors (who are also limited partners in a16z) — Andy Golden of the Princeton University Investment Company, Ben Gomez of Pilothouse Associates, and Edwin Poston and Mel Williams of TrueBridge Capital Partners — share their thoughts on tech valuations, liquidity in the markets, and what some in Silicon Valley may have a tendency to overlook.  

Matthew Craig-Greene of consultancy MJ Hudson points out, “Most public plans publish meeting minutes, and these can be a very interesting place to find information on manager selection.  CALPERS and some others even archive videos of sessions.”

GENERAL PARTNERS’ PERSPECTIVE

Weekend Fund: How to raise from LPs–All about sourcing, building relationships with, and closing LPs

DocSend: Looking behind the Curtain: How VCs raise their early funds

Nichole Wischoff: Metrics on a $50m Fund III

Yohei Nakajima: Metrics it took to get to our final close. Number of meetings, new relationships, conversion rate, referral sources, etc.

Ha Duong: How Emerging Venture Capital Fund Managers Should Think About Their LP Fundraising Strategies

Dan Abelon: A Quiz on First-Time VC Funds

Arjun Dev Arora: Emerging Manager ‘Must-Dos’: The Path to Your First Fund

Brad Feld: raising a $150m fund

Physics Ventures: Why LPs Invested in Our First Fund

SAASTR: On raising a $180m fund

Elizabeth Yin, Hustle Fund: How I Raised a First-Time VC VC fund and How we tripled our first VC fund to raise a $33.6M Fund 2

Jonathan Struhl: On raising a VC Fund

Quora responses on: raising a first VC fund

Lightspeed: VC Firms — How to Build an LP Base for the Long-term

Earnest Capital: Why you should send monthly advisor and investor updates

Charlie O’Donnell: Lessons learned from raising a first-time VC fund
Five Questions for Vetting an Investment in a New or Emerging VC Fund

Hunterwalk.com:  Homebrew’s Second Annual LP Meeting: Why We Do Them

Mahendra Ramsinghani: How LPs conduct DD

A look into fundraising for aspiring venture capitalists

On fundraising and privilege

VC Lab: The Ultimate Guide to Get Limited Partners

From an Accel alum: Learnings from a failed attempt at raising a (India-focused) VC Fund

How many LPs emerging managers had to meet for their fund I.

TECHNOLOGY PERSPECTIVE

How to find new LP investors for your fund at scale (+ list of top 46 LPs in German VC funds)

CLOSE RATES

A few VCs have shared their percentage close rates with LPs:

Homebrew: 100 Days of Fundraising

Confessions Of A VC Who Raised Money During Financial Armageddon

PLACEMENT AGENTS’ PERSPECTIVE

Evan Katz, Crawford Ventures: 44 Tips for Hedge Fund fundraising (but also applicable to VC/PE)

SAMPLE VENTURE CAPITALISTS’ DECKS FOR LIMITED PARTNERS

Video: “Harlem Capital partners pitch real estate magnate Ron Moelis on their mission to “do well and do good” as a diversity focused VC fund.”

Venture Capital Pitch Deck: What VCs raised with to get capital to invest in startups

Alpha Bridge: Deck review by Chris Douvos

Wischoff Ventures Fund III

Collected Venture Capital Pitch Decks: What VCs raised with to get capital to invest in startups

Nick Chirls and Alex Lines of Notation Capital in Brooklyn reveal the pitch deck they used to raise their $8 million ‘pre-seed investment fund’ in “VC/Firm Fit

Alternative Protein Fund deck

Venture capital LP one-pager for fundraising from Limited Partners

SURGE Ventures Series Seed & “A” Fund Pitch Deck

You can see many sample decks in the online platforms for limited partners to allocate to funds, e.g., Artivest, CEPRES, iCapital Network, Palico, and to a lesser extent OurCrowd and AngelList.

WHY INVEST IN EMERGING MANAGERS?

LPs’ analysis:

Greenspring Associates: VC’s Access Myth 

Cyan Capital: A Strategic Allocation to Newer GPs

Different Funds: Outperformance Indicators for VC 

Cambridge Associates: Venture Capital Positively Disrupts Intergenerational Investing

Others’ analysis:

1839 VC: Why Should Investors Consider Investing in Emerging Fund Managers?

Law of VC: Emerging Fund Managers Outperform Established VCs

Preqin: The Performance of Emerging Manager Funds

WHY INVEST IN SPECIALIST MANAGERS?

The Outperformance of Early-Stage Specialist Firms: A Data-driven Analysis

OTHER RESOURCES

List of placement agents and their fees, and other GP resources

SELECT CONSULTANTS WHO ADVISE ON FUNDRAISING

(Note these are mostly not placement agents.  A number of these firms have rich resources on their websites.)

Indiginus

Benjamin Ball Associates

Chestnut Advisory Group

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Comments

  1. HI DAVID, HAS BEEN A LONG TIME SINCE WE LAST SPOKE. gREAT COLLECTION OF RESOURCES. MOST PUBLIC PLANS PUBLISH MEETING MINUTES AND THESE CAN BE A VERY INTERESTING PLACE TO FIND INFORMATION ON MANAGER SELECTION. calperS AND SOME OTHERS EVEN ARCHIVE VIDEOS OF SESSIONS. MY TEAM AT mj HUDSON PERFORMS A SIMILAR SERVICE TO THOSE YOU MENTION ABOVE AND THOUGHT YOU MIGHT WANT TO INCLUDE FOR COMPLETENESS. MOST OF OUR CLIENTS ARE IN eUROPE, AT THE MOMENT, BUT MOST RAISE GLOBALLY. https://www.mjhudson.com/expertise/ir-marketing/