Launching a first time venture capital fund

Despite the various challenges faced by first-time and spin-off managers, success is more than possible given the appropriate tools and approach to institutional investors. In this report, we examine the recent successes of first-time venture capital managers and use Preqin data to uncover some of the key factors managers should consider when raising institutional capital for the first time.
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
VENTURE CAPITAL FUND VENTURE CAPITAL FUND TIME VENTURE CAPITAL TIME managed PREQIN
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
VENTURE CAPITAL FUND VENTURE CAPITAL FUND TIME VENTURE CAPITAL TIME managed PREQIN
<p>PREQIN SPECIAL REPORT:
UP & AWAY: LAUNCHING A FIRST-
TIME VENTURE CAPITAL FUND
NOVEMBER 2017
                
alternative assets.  intelligent data.
 Preqin Ltd. 2017 / www.preqin.com
2
PREQIN SPECIAL REPORT: UP & AWAY: LAUNCHING A FIRST-TIME VENTURE CAPITAL FUND
p3
Conquering the Lack of Track Record
p4
Approaching Investors: Where to Start
p5
Pre-Launch Considerations
p7
Tips and Tricks for Fundraising
p10
Success Is Possible!
FOREWORD
Positive performance for venture capital funds in recent years has sparked attraction from investors, resulting in an increasing number 
of first-time and spin-off managers entering the industry. 
Competition is high among managers: the venture capital fundraising market is home to over 1,500 vehicles seeking institutional capital. 
For less experienced managers, fundraising can be daunting  investing successfully in this crowded venture capital market relies on 
high levels of skill, extensive resources and strong networks. First-time managers may therefore be at a disadvantage in this competitive 
fundraising environment, so it is crucial that their time is efficiently spent targeting the right investors with plans and preferences that 
align with those of their fund.
While new or emerging managers may face additional challenges due to a lack of track record, Preqin's performance data shows that 
first-time and spin-off venture capital funds of vintage 2010 or older have generated substantially higher median returns than funds 
of experienced managers. Performance data can help make the case that first-time or spin-off funds could satisfy certain institutional 
portfolios that account for higher levels of perceived risk, as well as help managers to verify a record of successful performance in 
previous private capital roles. 
Is gaining institutional support realistic with so many managers on the road? How can these less experienced managers build successful 
relationships with new investors? What tools can first-time managers utilize to help raise capital efficiently and, more importantly, 
successfully? 
Despite the various challenges faced by first-time and spin-off managers, success is more than possible given the appropriate tools and 
approach to institutional investors. In this report, we examine the recent successes of first-time venture capital managers and use Preqin 
data to uncover some of the key factors managers should consider when raising institutional capital for the first time. 
We hope that you find this report useful, and welcome any feedback you may have. For more information, please visit www.preqin.com 
or contact info@preqin.com.
All rights reserved. The entire contents of Preqin Special Report: Up & Away: Launching a First-Time Venture Capital Fund, November 2017 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any 
electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Special Report: Up & Away: Launching 
a First-Time Venture Capital Fund, November 2017 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as 
advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes 
or refrains from making following its use of Preqin Special Report: Up & Away: Launching a First-Time Venture Capital Fund, November 2017. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the 
accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Special Report: Up & Away: Launching a First-Time Venture Capital Fund, November 2017 are accurate, reliable, 
up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Special Report: Up & Away: Launching a First-Time Venture Capital 
Fund, November 2017 or for any expense or other loss alleged to have arisen in any way with a reader's use of this publication.
                
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CONQUERING THE LACK OF 
TRACK RECORD 
As at September 2017, there are 
more than 590 first-time or spin-off 
venture capital fund managers raising 
capital worldwide; up from 470 this time 
last year, it is clear that competition is 
growing among less experienced firms. 
Nonetheless, these managers are also 
competing for institutional capital against 
more than 900 experienced managers in 
the global venture capital market.
Typically, managers without a track record 
face more obstacles when fundraising than 
more experienced managers; however, 
when comparing the returns generated by 
2006-2014 vintage venture capital funds, 
first-time managers generally outperform 
the pool of experienced venture capital 
managers (Fig. 1). The median net IRR 
for 2006-2014 vintage first-time venture 
capital funds (+12.9%) sits a full three 
percentage points higher than that of 
experienced managers (+9.9%), with risk 
levels (measured by standard deviation of 
net IRR) at 19.1% and 15.6% respectively. 
The higher return profile has not come 
without greater risk: Fig. 2 illustrates the 
higher standard deviation generated by 
inexperienced managers.
Investors with less restrictive investment 
criteria and rules, such as family offices, 
and a high level of confidence in their 
selection ability may be willing to take 
on this added risk in order to expose 
themselves to potential higher returns. 
More experienced investors with bigger 
programs are often able to combine their 
selection expertise with a large enough 
portfolio to achieve diversification 
and overcome the potential dangers 
of investing with a small number of 
untested managers, despite typically more 
restrictive investment criteria. 
Where a track record for a new entity is not 
available, it is helpful to demonstrate the 
past performance of managers while at 
former roles, managing venture or private 
capital. Citing verifiable net-to-LP returns, 
including the IRR for previously managed 
vehicles and multiples achieved for prior 
investments, and referencing the deals 
in which the new manager acted as lead 
partner or assumed a board position, will 
help to build credibility with LPs in lieu of a 
traditional track record. 
With the majority of first-time fund 
managers raising relatively small vehicles, 
it may be useful to highlight the potential 
advantages that smaller funds can bring 
as well as the opportunities unique to 
micro venture capital. Managers that 
achieve success are often those that can 
communicate the virtues of both their 
fund and the smaller first-time fund 
landscape, rather than simply presenting 
themselves as the potential superstar 
brand name of the future.
0%
5%
10%
15%
20%
25%
200620072008200920102011201220132014First-Time
Funds
Non-First-
Time Funds
All Venture
Capital
Source: Preqin Venture Capital Online
Median Net IRR since InceptionFig. 1: Median Net IRRs of Venture Capital Funds by Vintage Year
0%
5%
10%
15%
20%
25%
8%
9%
10%
11%
12%
13%
14%
First-Time Funds
Non-First-Time Funds
All Venture Capital
Source: Preqin Venture Capital Online
Risk - Standard Deviation of Net IRRReturn - Median Net IRR
Fig. 2: Risk/Return Profile of Venture Capital Funds (Vintages 2006-2014)
First-time 
managers 
outperformed 
experienced managers 
for 2006-2014 vintage 
venture capital funds
Vintage Year
 Preqin Ltd. 2017 / www.preqin.com
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PREQIN SPECIAL REPORT: UP & AWAY: LAUNCHING A FIRST-TIME VENTURE CAPITAL FUND
APPROACHING INVESTORS: 
WHERE TO START 
Preqin's Venture Capital Online tracks 
over 4,400 global investors actively 
targeting or considering investing in 
venture capital. More than half of those 
investors have either committed to first-
time managers previously, or are open 
to making commitments in the future. 
Knowing who and where to target can 
save time as well as money, which is 
crucial in such a competitive environment. 
Time wasted chasing dead-ends, such as 
investors with explicit policies to not invest 
in firms without a track record, could be 
spent forming relationships with those 
that are actively seeking new managers.
Preqin can be a useful tool for first-
time managers throughout the entire 
fundraising cycle by helping to identify 
the best prospects. Historically, North 
America-based investors have been the 
most active in first-time and spin-off funds; 
1,159 North America-based investors are 
known to have participated in such funds, 
more than Asia (646) and Europe (507) 
combined.
Foundations are the most active investor 
type in first-time or spin-off venture capital 
funds, with those based in North America 
accounting for 79% of all foundations 
active in these funds (Fig. 3). The second 
most active investor type is private sector 
pension funds, of which the largest 
proportion (70%) is also based in North 
America. Some of the largest foundations 
and pension funds seek out first-time 
managers through their emerging 
manager programs, such as W.K. Kellogg 
Foundation or New York State Common 
Retirement Fund.
While North America-based investors 
account for the largest proportion (40%) of 
investors with active first-time or spin-off 
mandates, this has declined from 51% in 
September 2016 (Fig. 4). Contrastingly, a 
greater proportion of both Europe- and 
Asia-based investors are actively seeking 
first-time or spin-off funds than this time 
last year, having increased by six and five 
percentage points respectively. 
0
50
100
150
200
250
300
350
FoundationPrivate Pension FundFund of FundsPublic Pension FundCorporate InvestorEndowment PlanInsurance CompanyBankGovernment AgencyInvestment CompanyFamily OfficeAsset ManagerWealth ManagerSuperannuation SchemeInvestment BankSovereign Wealth FundAsia & Rest
of World
Europe
North
America
Source: Preqin Venture Capital Online
No. of InvestorsInvestor Type
Fig. 3: Venture Capital Investors with Active Mandates for and/or Past Investments in 
First-Time Funds by Type and Location (As at September 2017)
51%
26%
23%
40%
32%
28%
0%
10%
20%
30%
40%
50%
60%
North America
Europe
Asia & Rest of World
Sep-16
Sep-17
Source: Preqin Venture Capital Online
Proportion of InvestorsInvestor Location
Fig. 4: Venture Capital Investors with Active First-Time or Spin-off Mandates by Investor 
Location, 2016 vs. 2017
FUND SEARCHES AND MANDATES
Subscribers to Venture Capital Online can click here to view detailed profiles 
of 727 institutional investors in venture capital actively searching for new 
investments over the next 12 months with the Fund Searches and Mandates 
feature. 
Preqin tracks the future investment plans of investors in venture capital, allowing 
subscribers to source investors actively seeking to invest capital. 
Not yet a subscriber? For more information, or to arrange a demonstration, 
please visit: www.preqin.com/vco
                
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PRE-LAUNCH CONSIDERATIONS
While it is encouraging news that 
over half of the 4,400 active venture 
capital investors Preqin tracks do consider 
first-time or spin-off funds, the question 
remains for new managers: where do I 
start? 
Identifying investors that may be a good 
fit for a fund based on past investment 
activity, preferences and future mandates 
is one of the primary qualifiers in any 
fundraising process, and there are some 
simple first steps that we suggest before 
hitting the road. 
LOCATION
Refining searches by investor geographic 
preferences can reveal opportunities 
with local investors that have mandates 
for venture capital funds focused on 
investments in their home region. 
Managers should seek LPs that have a 
remit for local development; for example, 
government agencies Government 
of Ontario and Oregon Growth Board 
recently made commitments to Scale Up 
Ventures Fund and Seven Peaks Venture 
Fund I respectively, which are first-time 
venture capital vehicles that focus on local 
development.
PREVIOUS INVESTMENTS
Managers targeting investors that have 
committed to vehicles like their own may 
have more success. Preqin tracks over 
375 first-time venture capital funds that 
have held interim or final closes since the 
beginning of the year (as at September 
2017), with many of the investors that 
are known to have committed to these 
vehicles still actively seeking out new 
opportunities. 
Guardian Life Insurance, for example, 
recently committed to Advantech Capital, 
a first-time growth vehicle targeting 
investments in the TMT, e-services, 
and healthcare sectors in China. The 
commitment is one of the 12-15 private 
equity investments the insurance company 
has planned for 2017. 
SOCIAL IMPACT AND ESG FACTORS
Does your fund have a focus on social 
impact/ESG factors? Managers raising 
funds with a social impact ethos can 
narrow their investor search accordingly. 
Investors such as Ford Foundation and 
TIAA are targeting impact funds which 
seek to deploy capital in minority-
owned, women-owned, environmentally 
friendly and socially responsible portfolio 
companies.
FUNDS OF FUNDS
A departure from the traditional LP-GP 
format, many funds of funds are highly 
active in the venture capital industry. 
Often looking to capitalize on first-time 
fund upside potential, more than 250 fund 
of funds managers across 34 countries 
are considering or investing in first-time 
venture capital managers. IIFL Private 
Wealth Management, for instance, has 
recently committed to Iron Pillar's maiden 
India-focused vehicle, Iron Pillar Fund I, via 
its fund of funds vehicle, IIFL Seed Ventures 
Fund I.
26% 
of investors using Preqin's Venture Capital 
Online have local mandates.
250
funds of funds are considering or have 
already invested in first-time venture 
capital funds.
1,800+
investors are known to have committed
to first-time venture capital funds.
VENTURE CAPITAL ONLINE
Venture Capital Online isolates the key venture capital datasets from Private Equity Online to provide a dedicated, cost-
effective platform for those clients purely focused on venture capital. It provides the perfect solution for fund marketers 
and investor relations professionals solely focused on venture capital funds, with detailed data on institutional investors, 
fundraising, fund managers, fund terms and conditions, fund performance, deals and exits, service providers and more.
: info@preqin.com  | : www.preqin.com/venturecapital
FIRST-TIME FUNDS ON VENTURE 
CAPITAL ONLINE
Register for demo access to find out how Preqin's Venture Capital services can help your 
business:
www.preqin.com/venturecapital
Source new investors for funds
Identify new investment opportunities
Conduct competitor and market analysis
Find potential deal opportunities
Develop new business
                
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Fig. 6: Sample Custom Benchmark: Asia-Focused First-Time Venture Capital Funds Targeting Telecoms, Media & Communications 
(Vintages 2004-2014)
Benchmark
Called up (%)
Distributed (%) DPI
Remaining Value (%) 
- RVPI
Net Multiple (X)
Net IRR (%)
Median
97.1
57.2
104.2
1.59
12.2
Weighted
95.1
71.7
115.3
1.87
14.5
Average (Mean)
89.4
86.2
107.1
1.93
20.3
Standard Deviation
15.7
122.2
96.2
1.70
21.4
Source: Preqin Venture Capital Online
TIPS AND TRICKS FOR 
FUNDRAISING
CONTACT PREFERENCES
Once promising leads are identified, 
contacting the potential investor directly 
through the proper channels could 
mean the difference between securing 
a commitment and not getting past 
voicemail. Whether contacting them 
directly or through a consultant, it is 
essential to be armed with the up-to-date 
preferred methods of contacting investors. 
Some institutional investors employ 
consultants that screen all incoming 
proposals, certain investors utilize a single 
general consultant, while others have 
several asset class-specialized consultants. 
Cambridge Associates, for example, serves 
as the general consultant to Maine Public 
Employees' Retirement System, University 
of Michigan Endowment and Charles 
Stewart Mott Foundation. Employees' 
Retirement System of Texas and Maryland 
State Retirement and Pension System 
both utilize asset class specialist Altius 
Associates, for its expertise in private 
equity and venture capital. 
CORNERSTONE INVESTORS
Securing one or more cornerstone 
investors (reputable investors making 
substantial early commitments) lends 
inexperienced managers considerable 
credibility among other investors, and can 
go a long way towards fundraising success. 
As time is of the essence for fundraising 
managers, starting conversations with 
influential investors early is key to gaining 
momentum as quickly as possible. 
Managers can identify potential 
cornerstone investors by seeking investors 
open to making commitments to funds 
that meet their preference criteria prior 
to the first close, as well as reviewing the 
market to establish which investors have 
recently committed to a first-time fund 
ahead of its first close. Preqin Venture 
Capital Online tracks over 750 investors 
that invest in first-time and spin-off funds 
and consider investing in a fund before its 
initial close.
Questa Capital Partners I and Karma 
Ventures I have both been successful in 
securing cornerstone investors within 
the past six months. San Francisco-based 
Questa Capital Partners secured almost 
half ($100mn) of its $250mn target 
at the first close, including a $50mn 
commitment from University of Texas 
Investment Management Company; and 
Karma Ventures received cornerstone 
investments from European Investment 
Fund, LHV Asset Management and 
Ambient Sound Investments for its early 
stage debut fund, surpassing its initial 
target of $55mn by the second close (Fig. 
5).
Fig. 5: Sample Cornerstone Investors in First-Time Venture Capital Funds, 2017 YTD (As at September 2017)
Fund
Firm
Target 
Size ($mn)
Fund Status
Cornerstone Investor(s)
Karma Ventures I
Karma Ventures
55
Second Close
European Investment Fund, LHV Asset Management,
Ambient Sound Investments
Anthemis Venture Fund I
Anthemis Group
100
Second Close
UniCredit Group, European Investment Fund, IMI Fondi Chiusi
Questa Capital Partners I 
Questa Capital Management
250
First Close
University of Texas Investment Management Company
Dymon Asia Ventures
Dymon Asia Ventures
50
Second Close
Digital Ventures, Siam Commercial Bank
Fireside Ventures Fund I
Fireside Ventures
47
First Close
Premji Invest, Sharrp Ventures
Source: Preqin Venture Capital Online
INVESTORS OPEN TO FIRST-TIME 
VENTURE CAPITAL FUNDS
Use a General ConsultantUse a VC/PE Consultant25%
15%
750 investors are 
interested in first-
time venture capital 
funds and first-close 
commitments
 Preqin Ltd. 2017 / www.preqin.com
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PREQIN SPECIAL REPORT: UP & AWAY: LAUNCHING A FIRST-TIME VENTURE CAPITAL FUND
BENCHMARK PERFORMANCE
Using Preqin's venture capital performance 
data, custom benchmarks can be created 
to provide context by tracking the 
historical performance of similar funds that 
have invested in a given industry or region. 
Custom benchmarks can be used to spark 
a potential LP's interest in an industry-
specific fund: they can demonstrate that, 
despite limited exposure, the industry 
has great potential and a strong track 
record by creating a benchmark to mirror 
the average performance of similar funds 
by industry and/or geographic focus. 
This data-driven approach could lend a 
strong argument to a manager looking to 
capitalize on an industry or region's strong 
track record and potential for success in 
future. For instance, Fig. 6 shows a custom 
benchmark for Asia-focused first time 
venture capital funds targeting telecoms, 
media & communications of vintages 2004-
2014. The benchmark was created with 
funds sized $500mn and under, a typical 
range for first-time vehicles, and reveals an 
average net IRR of over 20%.
DEAL SOURCING
Preqin's Venture Capital Online tracks 
over 125,000 venture capital transactions, 
including co-investments, exits, IPO 
pipelines and more. First-time fund 
managers can utilize this data to evaluate 
the market, discover trends and pinpoint 
future opportunities for their funds. They 
can also keep tabs on their peers, and view 
investments made by fellow first-time 
and spin-off funds. Through reviewing 
the activity of peers, managers can gain 
a better perspective of the potential 
deals that can be sourced for their funds, 
which can provide further context and 
encouragement to prospective LPs. A 
significant amount of first-time funds have 
sourced deals which turned into unicorns 
and household names, such as Softbank 
China Venture Capital Fund I's early pre-
Series A investment in Alibaba Group. 
Fig. 7: Sample Deals Invested in by First-Time Venture Capital Funds, 2017 YTD (As at September 2017)
Fund
Portfolio Company
Deal Size 
($mn)
Stage
Location
Industry
Stellaris Fund I
930 Technologies Private Limited
1
Seed
India
Internet
Elephant Partners I
A Cloud Guru Ltd.
7
Series A/Round 1
UK
Other IT
Urban Innovation Fund I
APANA, Inc.
4
Series A/Round 1
US
Software & Related
Medicxi Ventures I
ApcinteX Limited
18
Series A/Round 1
UK
Healthcare
Target Global Early Stage Fund I
Auto1 Group GmbH
83
Series E/Round 5
Germany
Internet
Phyto Partners I, Salveo Fund I
Wurk
2
Seed
US
Software & Related
Las Olas VC I
Wine Plum, Inc.
9
Series A/Round 1
US
Other IT
Huasheng Capital Fund I
Beijing Yixiao Technology Development Co., Ltd.
350
Series D/Round 4
UK
Telecoms
Section 32 Fund I
Auris Surgical Robotics Inc.
280
Series D/Round 4
US
Software & Related
Seaya Ventures Fund
Maxi Mobility Spain, SL
100
Series D/Round 4
US
Software & Related
Source: Preqin Venture Capital Online
Fig. 8: Sample Unicorns Invested in by First-Time Venture Capital Funds, 2000-2016
Fund
Unicorn
Deal Size ($mn)
Stage
Deal Date
Industry
Softbank China Venture Capital Fund I
Alibaba Group
20
Unspecified Round
Oct-00
Internet
Autotech Fund I
Lyft, Inc.
752
Series F/Round 6
Jan-16
Telecoms
DST Global I
Facebook, Inc.
200
Series D/Round 4
Dec-10
Internet
Capital Today China Growth Fund
JD.com
10
Series A/Round 1
Aug-07
Internet
Valar Ventures Fund
Legend Pictures, LLC
128
Unspecified Round
Apr-12
Telecoms
Baseline Ventures Growth Fund
Social Finance
4
Series A/Round 1
Sept-11
Business Services
Beijing Jingguofa Equity Investment Fund I
Ready-Go
452
Series A/Round 1
Aug-16
Internet
Source: Preqin Venture Capital Online
Custom 
benchmarks 
can be used to spark a 
potential LP's interest by 
demonstrating strong 
past performance in a 
given industry or region
                
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PLACEMENT AGENTS?
Among the many questions facing first-
time managers when raising capital is 
whether to use a placement agent. As well 
as assisting managers in many aspects 
of fundraising, they will primarily tap 
into their extensive networks to deliver 
potential investors and add credibility to 
new managers. Placement agents can also 
help to create marketing materials, which 
adds value to the overall expenditure. 
There are 263 placement agents active 
within venture capital, of which 49% will 
work with first-time and spin-off fund 
managers, compared to 45% in September 
2016. 
With Venture Capital Online, managers 
can conduct research and due diligence 
on service providers across a wide range 
of criteria, including fund type expertise, 
geographic focus, fund size and more. 
Utilizing these criteria, along with the 
ability to easily filter by total number and 
value of funds closed and currently raising, 
managers can find a placement agent to 
best meet their needs. For example, one of 
four known funds currently being raised 
by Fern Creek Ventures is Stellaris Fund I, 
which has secured $50mn of its $100mn 
target for early stage investments in Asian 
start-ups. Fern Creek has previously helped 
to close at least one other early stage first-
time venture capital fund and at least one 
Asia-focused general venture capital fund 
since 2016.
Thirty-six first-time managers currently 
raising venture capital funds have 
disclosed to Preqin that they are working 
with placement agents: just over 58% 
of these funds have held at least a first 
close, compared to 38% of first-time 
venture capital funds that are not using a 
placement agent. Health Velocity Capital 
I, the debut fund from Health Velocity 
Capital, has successfully raised $76mn of 
its $150mn target by its first close with 
placement agent Sparring Partners. 
While the fees charged by placement 
agents can be significant (up to 3% is not 
unheard of for a first-time fund), the value 
of the time saved and potential for an 
on-target close can make this a worthwhile 
investment. Many of Preqin's clients choose 
to employ a hybrid approach, such as 
seeking the services of a placement agent 
in less familiar regions while conducting 
their own fundraising process for allocators 
closer to home. 
45%
49%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Sep-16
Sep-17
Source: Preqin Venture Capital Online
Proportion of Placement AgentsFig. 9: Placement Agents that Work with First-Time Venture Capital Fund Managers, 
2016 vs. 2017
58%
38%
0%
10%
20%
30%
40%
50%
60%
Placement Agent
Used
Placement Agent
Not Used
Source: Preqin Venture Capital Online
Fig. 10: First-Time Venture Capital Funds in Market that Have Held at Least a First Close 
by Placement Agent Use
Proportion of FundsPlacement agents 
can utilize their 
extensive networks 
to deliver potential 
investors and provide 
added credibility to new 
managers
 Preqin Ltd. 2017 / www.preqin.com
10
PREQIN SPECIAL REPORT: UP & AWAY: LAUNCHING A FIRST-TIME VENTURE CAPITAL FUND
SUCCESS IS POSSIBLE!
Over 31% (114) of the venture capital 
funds that have reached a final 
close this year have been first-time funds, 
compared to 25% in the same period last 
year. The final sizes of first-time funds 
closed this year range from a high of 
$1.5bn, secured by Mubadala Capital 
Fund I, to much smaller funds of $1mn, as 
secured by Cannonball Secrets. Over the 
past five years (2012-2016), an average 
of 203 first-time funds have raised an 
aggregate $17bn per year. 
There are 594 first-time or spin-off venture 
capital funds in market (as at September 
2017), seeking a total of $83bn in capital. 
Of these, over a third (38%) have held 
at least a first close, including Yissum's 
Agrinnovation fund, managed by Target 
Global, which secured $4mn of its $6mn 
target from investors including Australia-
based single-family office Victor Smorgon 
Group. 
While this is encouraging news, the fact 
remains that the fundraising market is 
extremely crowded, and many managers 
currently in market will struggle to 
achieve success in the face of such intense 
competitive noise. Fundraising can be 
lengthy, and time is the manager's most 
precious commodity of all. First-time fund 
managers should start their process as 
early as possible, strategically identify 
the best prospects, and capitalize on 
all available data and resources to form 
partnerships in the most intelligent way. 
The sooner that fundraising success can 
be achieved, the sooner the real work can 
begin 
187
205
161
194
216
210
217
209
180
201
114
0
5
10
15
20
25
30
35
0
50
100
150
200
250
20072008200920102011201220132014201520162017YTDNo. of Funds Closed
Aggregate Capital Raised ($bn)
Source: Preqin Venture Capital Online
No. of Funds ClosedYear of Final Close
Fig. 11: Annual First-Time Venture Capital Fundraising, 2007 - 2017 YTD 
(As at September 2017)
Fig. 12: Sample First-Time Venture Capital Funds Closed in the Past 12 Months (As at September 2017)
Fund
Firm
Type
Fund Size 
($mn)
Final Close 
Date
Known Investor(s)
Mubadala Capital Fund I
Mubadala Capital
Venture Capital 
(All Stages)
1,500
Mar-17
Ardian
Asia-Germany Industrial 
Promotion Capital Fund I
AGIC Capital
Growth
1,000
Dec-16
China Investment Corporation
Asia Climate Partners
Asia Climate Partners
Growth
447
May-17
Asian Development Bank, ORIX Corporation, 
Department for International Development
Centana Growth Partners 
Fund I
Centana Growth 
Partners
Growth
296
Jun-17
Los Angeles Fire and Police Pension System, 
American Family Insurance, Baltimore Fire & 
Police Employees' Retirement System
Taxim Capital Partners I
Taxim Capital
Growth
223
May-17
International Finance Corporation, European 
Bank for Reconstruction and Development
Daphni Purple
Daphni
Early Stage
165
Oct-16
BPIFrance, Nokia, MAIF, Swen Capital Partners, 
PRO BTP
Ezdehar Egypt Mid-Cap Fund
Ezdehar Management
Growth
100
May-17
European Bank for Reconstruction and 
Development, CDC Group
Source: Preqin Venture Capital Online
Aggregate Capital Raised ($bn)First-time fund 
managers should 
start as early as possible, 
strategically identifying 
the best prospects 
and capitalizing on 
all available data and 
resources
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VENTURE CAPITAL FUND
NOVEMBER 2017
                
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