Virtual office hours for emerging venture fund managers! #OpenLP
There has been a proliferation of first-time venture capital funds in the last decade. Angels, operators and investors from established franchises are increasingly starting their own venture funds, often with a focus on specific sectors or geographies. This phenomenon is partly facilitated by platforms like AngelList, Carta, Assure, Vauban, to name a few. While it is easier to launch a VC fund than it was a decade ago, the competitive landscape for emerging managers is arguably the most challenging it has ever been as an increasing number of managers are competing for the same LP and founder attention.
The current Corona crisis has made launching a first-time fund, which was already difficult for many, an even more gruelling task. Fundraising markets have more or less frozen for all but the most established firms and it is hard to get comprehensive feedback on your fund strategy, portfolio construction model, fund setup & service providers, pitch deck, or fundraising pipeline in times when everyone is focused on putting out fires in their own operations. On top of that, many emerging managers are single GPs and often lack a sparring partner they can share concerns and difficulties with or brainstorm and bounce ideas off easily.
In the last couple of weeks, I’ve had several candid conversations with emerging managers to discuss the implications of the crisis on their portfolios, fundraising, and even the feasibility of managing a fund. Indeed, not being able to raise additional capital stops many managers from executing their original fund strategy. Even worse, many managers — especially those from underrepresented and non-privileged backgrounds — cannot afford to extend fundraising for another year or longer until LPs resume allocating. The managers I spoke to appreciated empathy and direct feedback from a peer. As this was beneficial to them, I realized I should go beyond my network and try to contribute to the wider community of emerging managers.
I’m therefore starting virtual office hours for emerging managers in the venture capital industry where I’ll listen to you and share my thoughts as an #OpenLP.
Over the last two years, I’ve given input as a professional fund investor to emerging managers in the process of setting up their fund. This includes best practices and things to watch out for. I’ve also had to raise capital for my own fund which means I understand not only how opaque the LP world is but also that being a great investor does not necessarily mean knowing the ins and outs of fundraising.
While I don’t know if I can provide solutions to your challenges, I will try to give my honest thoughts, contribute ideas, and help prevent mistakes that our team or other managers have made before. As I am based in Berlin and London, I’m most familiar with the tech and fundraising landscape in Europe. But I can probably be helpful to managers in other geographies as well since many aspects of starting a venture fund don’t have to do with the fund’s sector focus and region. Topics we could talk about:
- fund strategy & thesis
- portfolio construction and management
- fund setup, operations & service providers
- pitch deck
- fund terms
- fundraising strategy & pipeline
- perspectives of LPs, e.g. ‘edge’ in VC
- dealflow generation
- financial feasibility as an emerging manager
- challenges of single GPs
- challenges as an underrepresented manager
- partnership challenges
- communication in times of hardship
- etc.
If you are an emerging manager and would like to speak, please reach out on LinkedIn with a short message (I tend to ignore requests without messages) so we can find a time that works for our schedules.
For more information about me, visit my LinkedIn or Twitter.
