How to Raise Your First Fund With Right Side Capital Management’s Dave Lambert

Part 4: Managing Your First Fund as a Business and Building Fund II, III and Beyond

Theron McCollough
The Startup

--

Keys:

  1. 95% of VC funds fail. In addition to your passion and commitment, bring operational experience to juggle investing, fundraising, and running your small business.
  2. In the VC model, labor is a scarce resource. If you build a larger Fund II or III, consider the toll a higher volume of deals will take on your labor force.
  3. Most VC funds are under-diversified. You’re going to learn as you invest and the world will evolve as well — give yourself enough flexibility to readjust, adapt, and take advantage of the opportunities that come your way.
  4. When you’re in Fund I, you’re already raising for Fund II. Maintain close communications with current LPs and use their support to close prospective investors. If any investors step away, make sure you’re prepared to answer the question of why.
  5. In the end, get ready for a lot of hard work before you see substantial payouts. Make sure you’re getting joy out of your work or don’t commit to this 10+ year path.

Your VC fund is a startup, just like the ones you’re investing in. It’s a competitive, volatile environment with huge pressure to perform and high failure rates. How do you make it past Fund I to Fund II, III and beyond?

--

--

Theron McCollough
The Startup

Managing Director at Citizens Private Bank | VC/Tech; past Managing Director with First Republic,@SVB_Financial. founder, investor, limited partner, and banker