At the 2nd annual RAISE Conference this May, we heard from a wide range of fund entrepreneurs and limited partners about strategies that lead to success when raising capital as an emerging manager and managing that capital on an ongoing basis.
Over the next few months, we’ll be rolling out a series of articles featuring many of the unique insights that came out of the conference. I invite you to subscribe to receive an update when the articles are published.
In the meantime, here are a few of my favorite quotes from the event:
On why you can never have too many LP leads:
“If you’re new to fundraising, chances are you’ll run out of one of four things during the process: Hope, patience, financial runway, or LP leads. You can survive one or two of those, but usually not more than three.” – Charles Hudson, Managing Partner, Precursor Ventures
On tapping your network for intros:
“I found that often, if you ask, everyone always has one or two referrals. I think you’d be surprised if you just ask.” – Eva Ho, General Partner, Fika Ventures
On getting your story straight:
“The most important part for emerging managers is the upfront work – making sure the story is as tight as possible. You don’t get a second chance to make a first impression.” – Angela Stanley, Managing Director, Harpeth Fund Advisors
“I want to understand how in your theme as a GP, you’re actually bringing something different. Does your team have a unique network for sourcing? Does your team and network add value to entrepreneurs such that they’re going to select you to be part of their syndicate? And then, what is it about you as a team that can add value after your investment? I spend a lot of time thinking about these three pieces.” – Margo Doyle, Chief Investment Officer, S-Cubed Capital
On tips for the LP pitch meeting:
“One thing I always love to see is the team slide further up in the deck. We want to know who’s driving behind the wheel. It’s also important that everyone from the team who’s in the meeting participates. If you’re going to bring people in, they should all be talking.” – Eric Woo, Principal, Top Tier Capital Partners
On the benefits of diversity:
“I think it’s broadly beneficial for the whole industry and asset class to embrace and support more diversity – whether along gender, ethnicity, race or other lines. Research shows that diversity of thought, perspective, and background ultimately drives better investment decisions. It’s certainly something that we like to see.” – Brian Borton, Vice President, StepStone Group
On outsourcing operations:
“It’s easy for people to say ‘Oh, I’ll just outsource the whole back office.’ The reality is, even if you’re outsourcing something, you need somebody who understands what these people are doing to actively manage it. You can’t outsource everything.” – Trae Vassallo, Managing Director, Defy Partners
On the importance of honesty:
“Disclose bad news as soon as possible. LPs want to know that the company you invested in isn’t doing well. If it pops up on Bloomberg and our Chief Investment Officer sees it and asks me about it, I’m not going to be very happy if I haven’t heard from you and don’t know what’s going on.” – Christopher Vogt, Director, Equity Strategies, Margaret A. Cargill Philanthropies
* Quotes used with permission from our speakers.
We’re making our final preparations for the 2nd annual RAISE Conference, and I’m truly excited about the content and the network we’re bringing together again in this unique collaborative forum.
The market continues to be ripe for fund entrepreneurship. Technology is allowing companies to scale more quickly, more cheaply, and in a wider range of locations, changing the investment needs of startups and creating a wealth of opportunities for smaller, more focused funds. Furthermore, the success of trailblazing funds like Floodgate, First Round, Baseline and SoftechVC have left LPs looking for the next great new manager.
In fact, according to a detailed study by a former skeptic, Cambridge Associates, new and emerging firms accounted for 40-70% of the value creation in the top 100 venture investments over the past decade, with funds of less than $250 million accounting for an average of 20% of total gains.
Who is driving the next wave of emerging funds? In some cases, principals and partners at existing firms have spun out and started their own firms, creating smaller, specialized funds or focusing on particular market sub-sectors in which to carve out a niche. We’re also seeing prolific angels, operators of AngelList syndicates, experienced operators, and other entrepreneurs develop new types of fund concepts and approaches.
We’ll hear from a wide spectrum of fund entrepreneurs at this year’s RAISE Conference to learn about their strategies for success, and address the core foundational questions that all fund entrepreneurs face:
- How can I build a strong base of investors?
- What fundraising strategies are working right now?
- How can I accelerate the growth of my firm?
- How do I build a firm that lasts?
We’ve assembled an elite group of panelists and presenters to tackle these questions and bring us up-to-date on developments in the industry over the past year.
We’ve also expanded our “Springboard” track this year, which is a demo day for emerging managers. We’ll hear from 30 emerging managers who are currently in market to share 5-minute presentations on their team, their strategy, and their track record. For LPs, this day is an incredibly effective use of time to quickly see some of the most interesting new funds that are coming up.
We’re excited by the quality of the presenters; many of the funds already have one unicorn in their investment track record and quite a few impressive exits. We also have a number of exciting sector-specific funds on the agenda, including Artificial Intelligence, Urban Innovation, and Sustainability. We’re looking forward to hearing from them and learning what new trends are emerging.
Many more insights to come. See you in the Presidio!