What LPs Look for in First-Time Fundraisers

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Limited Partners investing in venture capital funds are similar to startups raising funds from venture capitalists.

In pitching LPs to invest in a fund, include the following:

They need to know the basic context of the fund.

Show the sector, stage, investment thesis, and the target fund amount.

Summarize this information so it’s clear and easy to find.

Show why the target sector is ripe for investment today.

Investors want to know the track record of the team.

While the team may not have raised funds before, they must have experience with funding startups, such as angel investing.

Show the track record from this work.

Showcase the team’s diligence process and how they screen and analyze startups.

Articulate the team’s competitive advantage.

This is most often from their network of who they know.

Include the cost of the investment, such as management fees and carried interest.

Note the payback terms to the VC and when it starts.

This is often after the investor receives their initial investment back.

Showcase this information in summary form on the first slide of the deck, as investors will want to know more before digging into the details.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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