15 steps to fundraising a brand new VC or non-public fairness fund – TechCrunch

15 steps to fundraising a new VC or private equity fund – TechCrunch

Launching is straightforward; fundraising is more durable.

I’ve been lucky to be a associate at two completely different VC companies over the previous 9 years, and we’ve grown AUM 10x each instances.

Primarily based on my expertise, taking the 15 steps beneath will assist construct the core of a high-performing fundraising and investor relations perform.

1. Construct the agency as a lot as potential earlier than soliciting LPs

The extra baked you might be, the extra investable you might be. The very best transfer is to put money into and warehouse some particular function autos that suit your technique. Nevertheless, which will distract you from the bigger purpose of elevating a fund, not only a particular function car.

The subsequent greatest transfer is to construct your core crew, e.g., recruit an advisory board, enterprise companions and EIRs. Lastly, collect suggestions. Yohei Nakajima, founding father of Untapped.vc, mentioned, “Earlier than pitching LPs and constructing my agency, I talked with over 50 folks I knew to get suggestions.”

2. Arrange a primary advertising and marketing toolkit: Deck, web site and social media

It’s just about obligatory to develop an in depth, data-backed deck and ideally a video pitch. Your supplies ought to ideally meet the expectations of the Institutional Restricted Companions Affiliation, even in case you’re not focusing on establishments. Hold these paperwork always updated, so all crew members are aligned on key numbers, e.g., whole {dollars} raised to date. You’ll look unprofessional in case you’re not coordinated.

Essentially, virtually nobody invests primarily based on a deck; they wish to discuss with the folks. Nevertheless, a high-credibility deck opens the door to a gathering the place you then have the possibility to promote your self.

Observe that restricted companions view formatting as a proxy for professionalism. It’s value investing a bit cash in a graphic designer who can design a constant web site, enterprise card, brand and presentation templates.

Richard Dukas, CEO, Dukas Linden Public Relations, mentioned, “Should you don’t have an internet site and don’t have any materials on-line presence, you probably gained’t get previous the primary hurdle with potential traders.”

If you’re fundraising, you’re promoting a luxurious good. The much less broadly marketed your fund, the extra useful it’s perceived to be. For instance, one LP advised me she prefers to obtain personalized emails from fund principals, versus a bulk-mailed quarterly replace. An excessive instance of this are enterprise capitalists who don’t even trouble with an internet site, e.g., Benchmark and Thrive Capital. They’re the equal of a nightclub with an unmarked door, however different traders might want to shape up their social media tech stack.

3. Make your on-line profile data-driven and internally constant

All crew members ought to have internally constant {and professional} profiles on Linkedin at a minimal and usually additionally on Twitter, Fb and/or different platforms you employ. Particularly, spotlight the metrics by which you measured your past activities: measurement of exit, variety of folks you managed, finances you had been accountable for, and so on.

4. Arrange an information room with a accomplished due diligence questionnaire

Among the many most necessary info to incorporate: particulars on return historical past, authorized paperwork, fund group chart, portfolio construction model, portfolio firm one-pagers, key personnel resumes and case research of previous investments. We’re utilizing Digify to handle this.

5. Put together FAQs for potential LPs

You’ll inevitably obtain a variety of one-off questions from potential LPs. Make certain to compile all of your solutions in a single doc so as to recycle and refine these solutions.

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