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

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Community Member

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?

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2 answers

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.

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Mike Suprovici

Jan 09, 2024

What is the exact question here?

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".

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

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