Fundraising is a major challenge for emerging venture capital managers, especially as the market tightens. With first-time VC fund capital raising dropping from $21.6 billion in 2021 to $10.3 billion in 2022, competition for LP attention is fiercer than ever. Ahead of SuperVenture North America, AQVC has released its "GP's Guide to Fundraising a VC Fund," offering valuable insights from global GPs on how to secure LP commitments.

It is well-known how challenging the fundraising process can be, especially for newcomers without a proven track record. According to reliable sources, the total capital raised by first-time VC funds dropped significantly from $21.6 billion in 2021 to $10.3 billion in 2022, and this trend continued into 2023 with first-time managers finding it increasingly difficult to attract capital.

Based on insights from thousands of conversations with global GPs on their fundraising efforts, AQVC shares its insights and best practices in the newly published "GP's Guide to Fundraising a VC Fund" – a detailed handbook designed specifically for emerging and developing funds, as well as anyone interested in navigating the challenges of fundraising.

About AQVC

AQVC is a tech-enabled asset manager for VC funds. Besides investing in VC funds with its Fund of Funds (currently at 19 fund investments), AQVC also offers a comprehensive suite of services to enhance capital formation - efficiency between LPs & GPs.

Guide Highlight

The "GP's Guide to Fundraising a VC Fund" serves as a roadmap for navigating the fundraising process. It emphasizes the importance of detailed planning and strategic execution. Key learnings include understanding the ideal investor persona and their behaviour, creating a compelling value proposition, and performing in-depth market analysis. The guide covers every aspect of reaching out to investors, from preparing your fundraising materials to establishing your funnel infrastructure and workflow. Additionally, it highlights the importance of continuous feedback for ongoing improvement and, finally, the critical role of technology in enhancing and nurturing engagement.

Through this guide, AQVC experts delve into every critical aspect of the fundraising process, equipping VC funds with the knowledge and tools needed for success:

• Research: Understanding investor types and their unique needs.
• Product: Crafting a compelling fund value proposition.
• LP Market: Defining your ideal investor profile.
• LP Marketing: Creating impactful fundraising artifacts, including analytical track records, compelling pitch decks, and one-pagers.
• LP lead Gen & Sales: Building a robust funnel infrastructure and workflow.
• Improvements: Gathering and leveraging valuable feedback for continuous enhancement.

A sneak peek:

Shaping your funds' value proposition (Product)

Investors allocate money to funds that they believe serve their needs & motivation. When fundraising, you need to see your fund as a product that has specifications to meet market needs. In order to convince investors, you need to shine on all the specifications and seem better than the alternatives. Here are the key aspects and dimensions to model your value promotion:

Claim

A fund claim is one very simple sentence that makes clear what you believe and what makes your investment strategy unique, an example could be:

“An emerging fund co-investing in European early-stage AI companies spinning out of university”

This claim is powerful as it explains the type of fund (emerging), the style (co-investing vs. leading) the geography (Europe) the industry (AI), and the sourcing (university spin-offs). Such a claim helps investors to put you into the right bucket.

Or

“Proven performance from investing into cash flow positive SaaS businesses across Asia”

Promise

A fund's promise indicates the goal of the fund and is the essential guidance for its investment strategy. Fund promises can sound like this:

“Aiming for top decile performance from taking calculated but high risk”

“Aiming for top decile performance and measurable social impact”

“+20% IRR from over average diversification”

“Fueling innovation in Health-Tech while aiming for top quartile performance”

Promises should be tailored to investor's needs and motivations discussed earlier in this guide

> Read the full GP's Guide to Fundraising a VC Fund here

Are you a VC Fund looking to enhance your fundraising efficiency? Here’s how AQVC Discovery can benefit you:

• Generate new, qualified LP leads: Our LP lead generation service is designed to identify and research relevant potential LPs for you and manage cold outreach to schedule calls with LPs. We also manage and conduct Pitch Day events where you can pitch your Fund in front of 25-50 qualified LPs.
• Increase LP conversion rates through tech-driven outreach: A fund profile using our AQVC Discovery technology is designed to pitch perfectly to LPs, considering their information needs and nurturing potential LPs over time.

To learn more about AQVC's tech & services, feel free to contact them at discovery@aqvc.com or schedule a call using this link.