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.
<p>PREQIN SPECIAL REPORT:
UP & AWAY: LAUNCHING A FIRST-
TIME VENTURE CAPITAL FUND
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Preqin Ltd. 2017 / www.preqin.com
PREQIN SPECIAL REPORT: UP & AWAY: LAUNCHING A FIRST-TIME VENTURE CAPITAL FUND
Conquering the Lack of Track Record
Approaching Investors: Where to Start
Tips and Tricks for Fundraising
Success Is Possible!
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, m