Existing Ventures Fund
This fund is designed to provide financing for the existing and new ventures of the associated companies.
Sell the opportunity
Steps for raising the fund
Understand your prospect
What are their goals?
Are they high net worth individuals or family offices? (Most first-time funds don’t succeed at raising from institutional investors)
What are their non-financial terms?
Create your pitch deck. Be sure to cover these key areas:
Your team — What sets you apart?
Your thesis — What types of investments will you make, and why?
Your target fund size
Your past returns
Keep good records
Use a CRM or CRM-like system to track all the conversations you’ll have.
Focus your efforts
Vet your funnel so you’re not wasting time.
Have a clear plan so you can keep your fundraising timeline as short as possible. Fundraising is a full-time job and you’ve got other work to do.
Set up shop
To run a fund, you’ll need some basic infrastructure in place. Start setting up your systems while you’re still out raising so that you’re ready when the money starts coming in. Here are the main steps you’ll want to take:
Select your primary service providers
Legal counsel, bank, and fund administration
Start budgeting
Track fund expenses
Set up your initial investments
Plan your first capital call
Source other providers
Tax advisor, audit firm, and office space
Your investors and fund administrator can make recommendations
Track your pipeline
Don’t miss out on good deals because you lost track of their emails.
Get regular updates from your portfolio companies
Advise them to report on KPIs consistently, and share any asks they have of you.
Here’s a guide you can share about how to write a great investor update.
Keep your LPs engaged
Besides investing in winning companies, you need to communicate results to your investors. Your Limited Partnership Agreement (LPA) should spell out the reporting requirements, but typically funds report quarterly to show investment cost and current market value. Here’s how to make sure you’re keeping your LPs up-to-date:
Determine your valuation policy
You’ll need to substantiate the values on your balance sheet.
Provide this to your audit firm, too.
Track everything as you go, and report quarterly on:
Fund financials (balance sheet, income statement, schedule of investments)
Investor capital account statements
Highlights from company updates
Major changes at the firm
Deliver an annual report, including audited year-end financials and tax reporting. This can be a lot of work because of the audit, so be sure to plan ahead.
Consider an annual meeting or annual letter