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My first role in VC (c. 2013) was Investor Relations for a first-time $40M fund based in LA & Singapore focused on emerging markets. In charge of fundraising, I learned VC from the ground up.
Starting today, I will share best practices I learned & invite others to chime in!
Starting today, I will share best practices I learned & invite others to chime in!
Step 1: It is important to learn about and differentiate between LP (limited partner) profiles, including:
- HNIs
- Family Offices
- Institutional
- Corporate
& their varying types, incentive structures & preferences. Saying "LP" can mean so many different things in practice.
- HNIs
- Family Offices
- Institutional
- Corporate
& their varying types, incentive structures & preferences. Saying "LP" can mean so many different things in practice.
Even on this singular topic there is so much for us to unpack 
but I encourage aspiring emerging managers to start with the basics.
Institutional LPs, for example, break into different profiles, including:
- Fund of funds
- Pension funds
- Endowments
- Sovereign wealth funds
but I encourage aspiring emerging managers to start with the basics. Institutional LPs, for example, break into different profiles, including:
- Fund of funds
- Pension funds
- Endowments
- Sovereign wealth funds
The simplistic way to differentiate between institutional LPs and HNIs/FOs/Corporates is that institutional LPs are professional, full-time investors/LPs.
Some % of their total portfolio may or may not include 'alternatives' which may or may not include stakes in VC funds.
Some % of their total portfolio may or may not include 'alternatives' which may or may not include stakes in VC funds.
For emerging managers, factor in the following:
- Fund of funds focused on *your* stage and fund size
- Other institutional LPs w/ an explicit 'emerging manager' strategy within their alternatives allocation
Build relationships early. These relationships take *years* to grow.
- Fund of funds focused on *your* stage and fund size
- Other institutional LPs w/ an explicit 'emerging manager' strategy within their alternatives allocation
Build relationships early. These relationships take *years* to grow.
Fund of funds (FOF) are great because they have visibility across fund managers and, much like a VC-founder relationship, can be *very* active/supportive.
A few well-known & vocal examples in the market include @CendanaCapital @MKRocks & @foundrygroup @LDEakman @jfreester.
A few well-known & vocal examples in the market include @CendanaCapital @MKRocks & @foundrygroup @LDEakman @jfreester.
Other institutional investors like pension funds, endowments, sovereign wealth funds et al can also be helpful, but it is important for emerging managers to know these require *very* different types of diligence/communication vs. HNIs (individuals), family offices, & corporates.
