In another post I created for early-stage founders, The Essentials of Early-Stage Startup Fundraising, I mentioned the importance of creating content assets to help streamline and scale your outreach: 1) A pitch-deck, and 2) An introductory snippet. The same set of content assets applies to emerging GPs as much as it does for founders.
The pitch-deck communicates:
A clear thesis (focus) that demonstrates market potential and managed risk.
A vision beyond the first fund.
Track record including but not limited to; past exits, current and past investments.
Performance record, and in particular, how you perform (alpha) better than industry benchmarks (beta).
Current fund status, including realized and unrealized market value.
Deal flow insights.
Portfolio construction.
Proposed fund size.
Investment criteria and due-diligence process.
High-level Investment Committee (IC) process.
Fund terms such as; management fee, incentive allocation, liquidity, committed assets, and capacity.
Team profile and interpersonal synergies.
Networks and strategic partnerships.
A compelling reason to act now, not later.
The first pitch-deck you create isn’t going to be perfect. But as you meet LPs, you can gather feedback and iterate accordingly. Once you are clear on your messaging, we suggest sending it to a deck designer to help you communicate it visually. Here are some resources for deck designers: link.
The introductory snippet is a shortened, condensed version of the deck that communicates a combination of the following:
Credibility and track record.
Fund thesis and points of differentiation.
Market opportunity.
Key team members.
Why act now?
The above attributes are not prescriptive. They are guidelines. The snippet is designed to help you achieve a few things:
Generate interest from your immediate 1st-degree network.
Activate your 2nd-degree network to get introductions to LPs.
Help LPs quickly decide if it is relevant to them and whether it is a credible opportunity.
Secure meetings with LPs so you can present your full deck.
More importantly, because a snippet is so short (100-200 words), the process of creating the snippet will force you to clarify key aspects of your fund to a higher degree. Here is a sample snippet from Unshackled. They do an excellent job of communicating their thesis, establishing credibility, and communicating the opportunity implicitly.
“Unshackled Ventures is the first and only early-stage venture capital fund for immigrant founders. We are actively investing out of our second fund and manage over $25M in assets. Besides investing in immigrants, we sponsor their visas & green cards to enable them to spend 100% of their time building companies. Our fund is backed by some of the most notable investors in the country, including Emerson Collective, Bloomberg Beta and one of the top retail families in the world. Unshackled has been featured in numerous publications and national media outlets, like the Wall Street Journal, Huffington Post, ReCode, Forbes, and Bloomberg.
Some of our more recent investment areas include Autonomous Technology (driverless trucking), Space Technology (Cell tower in space), Climate Change (Methane detection of Oil & Gas), Healthcare Tech (Radar monitoring of senior living), Food innovation (Plant-based protein and modernized food distribution), Future of Work (Coding boot camps), Industry 4.0 (Blockchain, On-demand manufacturing), and Applied AI (Legal, Water treatment, eCommerce, etc.).
Our portfolio companies have raised $60M+ from 330+ co-investors including top investors like Y Combinator, First Round Capital, Sequoia/Accel Scouts, NEA, Khosla, Shasta Ventures, and Village Global (Zuckerberg, Gates, Bezos backed fund).”
Albeit, Unshackled Ventures are onto Fund II. However, the first-principles apply to Fund I too.