Initial Search Fund Raise
June 08, 2022
by a searcher from Yale University - School of Management in Juno Beach, FL 33408, USA
I have started raising the search fund and it is going well so far. Does anyone have general advice for managing the initial raise? If you have gone through the process recently, maybe you could give me some ideas of the pace at which I should do outreach, etc. If anyone wouldn't mind a quick call I would appreciate that. Thanks.
from Harvard University in Dallas, TX, USA
1. I wanted to meet everyone face to face (hence I flew to cities with a few meetings arranged)
2. I wanted people whod rum companies, no associates or PE advisors (for me at the time, that's what I was looking for)
3. I wanted to keep the size of the fund raised small , I thought this meant more likely I could do a small interesting deal
Anyway, I didn't know they were going to be my partners for between 6 and 12 years and that those decisions were really helpful.
So a few points, and this is as a funder
1. Your investors can't remember who you are until something happens. Sorry to be blunt, but most are in 10+ deals. If you never met them face to face.....they don't know you. A unit isn't material money to them. This is the same for funds and for individuals. People who are newer to it Maybe have less of this as it's all newer.
2. You get send a ppm that are all the same and a generic email.
3. The conversations on the phone are basically the same. The investor may have some set questions but mostly they just want to know who else is in and they are going with that.
It is really really really easy to be different. Spend 1 day on your generic ppm.
Research all potential investors, who you would like to have (funds suit some people, hnw suit some people, ex ceos suit some people, hands on suits some people etc etc )
Then personalize and talk to someone who knows them well and ask.
1. What's something about them that's cool or interesting
2. Is there something they were in that's gone well or badly.
People is who you are trying to meet. The more it's a process.....the more you'll get the fund raised and get stung down the road.
Selling doesn't seem to come naturally to most searchers. Spend a few days thinking about it and you'll have a full calendar of meetings.
One last logistical point. If you spent 10k flying all over the place and met all the investors face to face. I'd expect you to expense this when the fund is raised.
from Boston University in Cupertino, CA, USA