Fundraising as an Emerging Manager: How to Source & Connect with LPs

Mia Nguyen
11 min readNov 9, 2022

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Welcome to the first post that kicks off a new series, Fundraising as an Emerging Manager 🤝

This series will outline the process of raising funds for early-stage emerging managers — whether it be sourcing investors, managing an investor pipeline, preparing fundraising materials, understanding the diligence process or initiating a first close. If you’ve dabbled with the thought of starting a fund, identify as an emerging manager, or are an entrepreneur interested in understanding the inner workings of your institutional investors, read on!

My name is Mia, and I’m an Operating Principal at Four Cities Capital. I’m a recent grad navigating the world of venture capital with fresh eyes. My father immigrated to the United States when he was a teenager, and every day I feel lucky to be able to live out our shared dream of exploring the business world together. While I have yet to raise my own fund, I’ve had the opportunity to work closely with those who have — leading investor relationships & fundraising as Chief of Staff to the co-founding partner at Underscore VC and now being the only full-time employee managing Four Cities Capital. So, I’m right there with you: wanting to understand more about this mysterious industry that is venture capital. This series is written in part from my own experience, but also from others further along in their VC journey who have helped me so we can all learn together. Let’s get into it!

Part 1: How to Source & Connect with LPs

The advice I received early on in my career was to spend at least some time in a sales role, the rationale being that we will always be selling something during our life. Selling your fund strategy & and yourself to Limited Partners (LPs) is an example of this.

When one of my core responsibilities was fundraising for a venture firm early on in my career, I was told to think like a salesperson and account manager. The catch was that I was 21 years old and had spent zero time in either of those two functions — let alone worked full-time outside of being a student.

But I accepted the challenge, blasted my pump-up music (big Lizzo fan), and began to reach out to people who could accelerate my learnings so I could then excel at the role. My questions were endless, but I was eager to learn. What types of LPs typically invest in emerging managers? How do I find them? How do I get connected with them? What is my process of engaging them? How many should I be engaging for the target fund size? And so on.

If you only have a few minutes to skim this article, the key points are:

  1. High net-worth individuals (HNWIs) and family offices are more likely to take a bet on emerging managers. First-time fund managers and those early on in their fund cycle tend to welcome a greater amount of smaller checks from friends & colleagues as opposed to being anchored by an institutional LP (i.e. foundations and university endowments). The latter tends to prefer to build relationships over a fund cycle or two before writing a larger check.
  2. Your fund is your product and you need to find product market fit. Spend time crafting your investment thesis and brainstorm who might resonate with your approach. This will help you develop your ideal LP profile.
  3. Leverage your personal network to connect with LPs. Brainstorm people you may know who are looking to diversify their personal portfolio, are connected with LPs through personal or fund relationships, or work at asset management firms that invest in venture capital.
  4. Have a toolkit to identify and pre-qualify LPs. Subscribe to newsletters, build web scrapers, and leverage tools like PitchBook to identify LPs actively deploying capital into the private markets. Tools like Preqin provide background on LPs so you can pre-qualify whether they may be a fit prior to reaching out.
  5. Don’t ask for capital straight out. Approach initial conversations with the intent to ask for their help and advice as opposed to their money. Whether the latter comes or not, there is a lot of value in collaborative conversations when building your fund foundation and people like to feel like they are a part of the journey.

A big thanks to Gil Zimmermann (FXP), Alex Iskold (2048 Ventures), Eric Woo (Revere), Nick Adams (Differential Ventures), Diana Murakhovskaya (The Artemis Fund), Roseanne Wincek (Renegade Partners), Triin Linamagi (Sie Ventures), Danielle Strachman (1517 Fund), and Daniel Acheampong & Yasmin Cruze Ferrine (Visible Hands) for sharing their input and helping us learn together in the open.

Which types of LPs should you reach out to?

“Think about your fund like it’s a product. What pain does your product solve? How are you uniquely positioned to solve that pain? What LPs might be interested in your product?” — Gil Zimmermann (FXP)

Gil stressed the importance of needing to get to know yourself before you fundraise. While many emerging managers may receive initial commitments from those they know personally, it’s not a scalable fundraising strategy. You need to know your pitch, understand what investor profiles will resonate with it, and target them intentionally.

To understand which LPs may be interested in your fund, you can ask LPs questions such as:

  • Do you invest in first-time fund managers / emerging managers?
  • What is your investment philosophy?
  • What are your investment criteria when evaluating new managers?

“I think chance favors a prepared mind. I spent a lot of time preparing — crafting a differentiated story, building a financial model and most importantly spending time figuring out WHO our core LP base should be and WHY. A lot of first time managers don’t have enough discipline to just sit and plan and research and that causes fundraises to take longer. Since I’ve coached founders at Techstars to prepare for fundraising, I ate my own dog food and thoroughly prepared before getting to the market. I think that strategy paid off.” — Alex Iskold (2048 Ventures)

So before you start dating with LPs, make sure you know yourself and what you’re looking for first.

Who invests in emerging managers?

Emerging managers in VC are loosely defined as fund managers whose assets under management (AUM) range from $25M — $100M and/or have typically raised less than three funds.

I was so intrigued by what types of LPs took the risk to invest in the VC newbies that I decided to write my senior thesis on this topic in college. I learned that high net-worth individuals (HNWI) and family offices are the primary LPs investing in early-stage emerging managers. There are also some institutional investors (i.e. foundations and university endowments) that have investment mandates for first-time and emerging managers that require them to allocate a percentage of their capital to said category.

HNWI investors tend to invest given a personal relationship to the fund manager(s). For example, the professor who sponsored my senior thesis shared that his relationship with a fund manager started years prior to his investment in the fund. The two initially connected through another tech community, and remained close until the GP decided to take the leap and start a fund. My professor was the first to write a check.

In this current macro-environment, some LPs may be tightening their purse strings and be hesitant to deploy further capital into the private sector. However, there are still many opportunities out there for those who are in it for the long term and can brave a few turbulent years.

“LPs that recognize that the reset has provided favorable conditions for generating good returns in the upcoming vintage years are still looking. This tends to be the family office crowd and newer alternative asset management platforms that are democratizing VC to provide accessibility to a new crowd, like the private wealth community.” — Eric Woo (Revere)

How can you leverage your personal network for fundraising?

An image of a Google search for “how to raise a venture fund as an emerging manager.”

Unfortunately, Google does not spin out a list of prospective LPs you should target no matter how many variations of the question you may input and search. Like many things in life, we must get creative to find our answers.

One route is to leverage personal and mutual connections. You can do this by searching your network for connections to:

  • Accredited investors who may be interested in diversifying their personal portfolio. As mentioned above, many Fund I investors tend to be HNWIs who have a personal relationship with the GP. They may not be as knowledgeable about the asset class that is venture capital but are interested in dipping their toes in through the medium of a trusted friend. For example:

Nick Adams (Differential Ventures) shared that the LP composition of their $20M Fund I was primarily HNWI and family offices. “In most cases LP conversations were with close friends and prior colleagues who knew us well and wanted exposure to the asset class — the LPs check oftentimes being their first investment into venture capital, managed by a trusted and/or recommended friend.”

Diana Murakhovskaya (The Artemis Fund) and her co-founders approached HNWIs in their network with the intention to share an update on what they were working on. “We spent a lot of time educating people who had never invested in venture before by talking about what we were building, why we were excited, and seeing if the opportunity resonated with them.”

  • Fund managers who have recently closed a fund themselves. Ask them about their fundraising process and whether they would recommend any LPs for you to begin building relationships with. For example:

Roseanne Wincek (Renegade Partners) shared that many LPs who committed to their $100M Fund I were referrals from other friendly GPs. “Yes, it’s competitive (in venture) but there’s also a lot of cooperation. You may be fighting head to head for a deal one day, but the next day you’re sitting together on a board with them. We need to work together.”

Gil Zimmermann (FXP) named that the high degree of empathy entrepreneurs have for one another carries into the VC world. “Emerging managers know how hard it is to fundraise and people want to help you.” I would like to think that this blog post is a small demonstration of how willing people are to demystify the fundraising process and help others as well.

  • Individuals who may be employed by institutional investors. Titles to search within your LinkedIn connections include: Chief Investment Officer (CIO), Director of Investments, Portfolio Manager, Managing Partner, General Partner, etc.

How can you build your network of LPs?

I recognize that many people, myself included, do not enter the industry with the pre-existing relationships that can be so helpful. That’s when we must get scrappy 😉

My recommendation is to invest in the proper tools and reach out to LPs who are actively deploying capital into the market. You can identify these LPs by:

  1. Pulling a PitchBook report for venture capital funds that have closed in the last 12-months. If you don’t have a PitchBook account, you can search through LinkedIn/Twitter for fund announcements.
  2. Searching each fund managers’ profile on PitchBook and viewing whether the ‘Limited Partners’ section discloses any investors in the fund. If you don’t have a Pitchbook account, read through press releases on LinkedIn/Twitter and search for who re-shared the announcement to see if there are any mentions or hints of investors.
  3. Researching disclosed Limited Partners on Preqin, a tool that provides an overview on various asset class investors. Each profile shares details on the Limited Partners investment strategy, typical check size, investment mandates (if applicable), team members, existing investments, etc. This is an optional but recommended step when building your pipeline so you can pre-qualify leads prior to engaging.

“The best way to build an LP network is through sharing deal flow. Relationships are built on trust, and trust takes time to build. In the meantime, show them what deals you can get access to and understand what they’re interested in.” — Triin Linamagi (Sie Ventures)

Sie Ventures has yet to raise their first fund, but Triin is beginning to build relationships with prospective LPs by inviting them to invest alongside the firm via Special Purpose Vehicles (SPVs). This provides Sie Ventures the opportunity to demonstrate their investment thesis in action without yet requiring a long-term commitment from LPs.

How do you ask for money?

When Danielle Strachman (1517 Fund) and her co-founder decided to spin out of the Thiel Fellowship and start their own fund, they brainstormed a list of 300 people they knew (i.e. mentors, previous colleagues, friends, etc), shared the news of their new endeavor, and began asking for help. The key word there is help…not money.

“People would ask me, ‘isn’t it weird to ask people you know for money?’ Yeah, that would be weird, but I was never asking for money directly. It was more like, look at this cool new thing I’m doing. Do you know anyone I should talk to about this? And people opened their networks.” — Danielle

Daniel Acheampong (Visible Hands) and his co-founders didn’t ask for money upfront either.

“We approached the conversation asking to brainstorm with them. We were almost completing what was like a ‘market assessment’ trying to understand what LPs actually cared about and whether our messaging was resonating with them. At some point, your thesis will get more defined through these conversations and you can begin asking what their willingness to pay is.” — Daniel

Diana Murakhovskaya (The Artemis Fund) and her co-founders approached initial LP conversations like founders trying to find product-market-fit.

“We began by asking questions like a startup would do if they were doing customer discovery. You need to learn about them (LPs) first. What drives them? What are they interested in besides returns? Treat LPs as individuals and not just a check.” — Diana

This comes full circle to needing to know yourself first and building your ideal LP archetype prior to fundraising. Then, if done correctly, that’s when the magic happens.

“In a sense, raising a VC fund is building a network of LPs who naturally belong together.” — Alex

How do you get connected with LPs?

There are three ways to reach out to prospective LPs:

  • Send a direct note. If you know a person who may be able and interested in investing, send them a friendly note asking to reconnect. Remember that the immediate ask is not for capital, but rather for their time — something that is arguably even more valuable.
  • Ask for a warm introduction. Build your domino line. Talk to one person you know and ask them to introduce you to two other people they know. For example, after Danielle connected with a colleague, she would follow up with something along the lines of:
Email example from Danielle Strachman (1517 Fund) on how to request warm introductions to prospective LPs.
  • Send a cold outreach. Never doubt the power of a well-structured and personalized email. Below is a sample template with fill-in-the-blanks.
Email example from Mia Nguyen (Four Cities Capital) on how to structure a cold outreach to prospective LPs.

“Entities and individuals can spot what looks like a low effort letter from a mile away. Assume that the recipient gets dozens of these a week! It has to include aspects that only apply to the reader — highlighting their investments, affiliations, or recent news. Adding plenty of customization and sharing why there would be strong alignment is key.” — Yasmin Cruze Ferrine (Visible Hands)

Later in this series we will cover what material and metrics to share with LPs. This information will help you craft your outreach to prospective LPs when fundraising. If you are actively fundraising and can’t wait for the next blog, shoot me an email below!

⏭ Up Next: How to Manage A Pipeline of LPs.

After learning how to identify and connect with LPs, I was curious what the sales process looked like. How many LPs should I be engaging for the target fund size? How do I keep them engaged throughout the funnel? What tooling should I use to keep organized? The next blog post will cover this and more so keep an eye out.

Thanks for taking the time to read this article. Feedback and questions are always welcomed. Feel free to send me a message at mia@fourcitiescapital.com. Be well & be kind! — Mia

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Mia Nguyen

Operating Principal @ Four Cities Capital | Community @ All Raise