I really enjoyed this one. I've been debating for some time about quitting my job and starting my own fund. I currently run a partnership (without fees) with a group of friends. I will make sure to read this periodically. And I wish you nothing but success on your journey.
That crossroads is where conviction and stewardship collide. Running friends’ capital is already an act of trust; scaling into a fund just formalizes what you’re already doing, carrying other people’s futures on your shoulders.
Besides get a revered tier 1 allocator in, I believe point #1 mentioned by Paul Graham below is equally important. This is what skyrocketed fundraisings of Tiger Cubs, backed by Julian's reference + bit of his cash. Even if there was great variance among Tiger Cubs: e.g. Viking/Halvorsen very skilful, Tosca Fund not so much; they still all got very healthy day 1 seed money.
Good luck guys.
"1) Intros vary greatly in effectiveness. The best type of intro is from a well-known investor who has just invested in you. So when you get an investor to commit, ask them to introduce you to other investors they respect. Don't ask investors who say no for introductions to other investors. That will in many cases be an anti-recommendation.
2) The next best type of intro is from a founder of a company they've funded. You can also get intros from other people in the startup community, like lawyers and reporters.
The biggest factor in most investors' opinions of you is the opinion of other investors. Once you start getting investors to commit, it becomes increasingly easy to get more to. But the other side of this coin is that it's often hard to get the first commitment. Getting the first substantial offer can be half the total difficulty of fundraising. What counts as a substantial offer depends on who it's from and how much it is. Money from friends and family doesn't usually count, no matter how much. But if you get $50k from a well known VC firm or angel investor, that will usually be enough to set things rolling."
I really enjoyed this one. I've been debating for some time about quitting my job and starting my own fund. I currently run a partnership (without fees) with a group of friends. I will make sure to read this periodically. And I wish you nothing but success on your journey.
That crossroads is where conviction and stewardship collide. Running friends’ capital is already an act of trust; scaling into a fund just formalizes what you’re already doing, carrying other people’s futures on your shoulders.
I recently wrote on that exact dynamic, how capital allocators aren’t just moving money, they’re mediating trust across time. Sharing here in case it’s helpful as you weigh the leap: https://conduitofvalue.substack.com/p/fragility-in-plain-sight
Thanks so much for the kind words. Really glad you enjoyed the piece and I wish you all the best if you do start your own fund!
Great read! Thanks for sharing your experience
Thanks Paul - much appreciated. Hope you’re well!
One more thing.
Besides get a revered tier 1 allocator in, I believe point #1 mentioned by Paul Graham below is equally important. This is what skyrocketed fundraisings of Tiger Cubs, backed by Julian's reference + bit of his cash. Even if there was great variance among Tiger Cubs: e.g. Viking/Halvorsen very skilful, Tosca Fund not so much; they still all got very healthy day 1 seed money.
Good luck guys.
"1) Intros vary greatly in effectiveness. The best type of intro is from a well-known investor who has just invested in you. So when you get an investor to commit, ask them to introduce you to other investors they respect. Don't ask investors who say no for introductions to other investors. That will in many cases be an anti-recommendation.
2) The next best type of intro is from a founder of a company they've funded. You can also get intros from other people in the startup community, like lawyers and reporters.
The biggest factor in most investors' opinions of you is the opinion of other investors. Once you start getting investors to commit, it becomes increasingly easy to get more to. But the other side of this coin is that it's often hard to get the first commitment. Getting the first substantial offer can be half the total difficulty of fundraising. What counts as a substantial offer depends on who it's from and how much it is. Money from friends and family doesn't usually count, no matter how much. But if you get $50k from a well known VC firm or angel investor, that will usually be enough to set things rolling."
Great thoughts - thanks for sharing!
What you need is one tier 1 allocator getting in. Just one.
They will make you sign an NDA not to tell anyone. Because most allocators follow a handful of allocators like sheep.
I think Yale still has such power. Definitely it had during Swensen's tenure.
Fantastic read - thank you for sharing!
Thanks!
Fantastic to read. You're not saying it's hard to differentiate in the industry. How are you trying to differentiate your fund?
It’s a challenge for sure. For us, the research we publish in the newsletter arguably helps us stand out and build our profile.
Excellent stuff
Thank you!
Absolutely fantastic read and all the best for your fund!
Thanks Roman! Much appreciated.