Ask AI
Log In Sign Up
Go to General VC Questions
Previous Question Next Question
1
General VC Questions

What is a good argument a new/emerging Venture Fund for LPs who don't have experience with VC?

Asked by:
Community Member
2
0
Jan 09, 2024
I asked DecileBase, but only found very generic answers. It would be useful to have a clear pitch for why a potential LP would want to invest in a venture firm. 

How do new and emerging managers perform versus larger funds? How do they perform versus the market? 
2 answers
1
Mike Suprovici
Accepted Answer
Jan 09, 2024
We have developed an article for GPs to share with LPs: https://govclab.com/2023/04/26/how-to-invest-in-vc/. That being said, your proposed approach will not work. Sending LPs information about how the emerging managers over-perform other asset classes is a guaranteed fail.

LPs that invest in new and/or emerging managers invest in the Managing Partner(s) because they believe that those INDIVIDUALS are uniquely qualified to executed on the thesis and they resonate with the thesis and want to be part of the mission. If an LP asks you questions like: how does this compare to investing in [insert asset class], you have lost. This is a no and you will struggle to recover from this. That means that your pitch was un-succesful. 
Add a comment
We're on a working group call right now, and folks are interested in a little write up that answers the question "why invest in VC?", specifically in new and emerging managers. Is there an article on the website that covers this?
- 
Community Member
Jan 09, 2024 9:42pm
It would be useful to have some numbers like "new and emerging managers perform 'x' better than the market".
- 
Community Member
Jan 09, 2024 9:42pm
 Add a comment

Log In or Sign Up

Please Log In, or Sign Up to participate in the discussion.

Log In
or
Sign Up

Apply to VC Lab Cohort 16

Get full access to Decile Base and the Decile Hub venture platform for free by joining the VC Lab program.

Apply to VC Lab Cohort 16
Related Questions
Can you recommend insurance firms that provide policies for venture capital firms? 0 May 03, 2023 Should I Request NDA Coverage for Sharing Confidential Deal Memos with LPs Who Signed a PACT? 0 May 03, 2023 Is there a venture partner agreement that covers LP fund-raising/closing? 0 May 03, 2023 Is Forming an Investment Committee for Fund II Preferable or Should Venture Partners & GPs Decide on Startup Investments? 0 May 03, 2023 What's a good policy for making cash or in-specie distributions? 1 Oct 23, 2024