How LPs Test the VC Fund

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Limited Partners test VC funds before investing.

Here's a list of the criteria LPs use to test the fund:

Does the fund have a track record that is compelling?

Does the fund fit an open slot in the LPs asset allocation?

Does the fund manager have access to deals the LP does not?

Does the fund manager have the ability to construct a better portfolio than the LP?

Can the fund manager better support the startup than the LP?

Does the fund bring access to other LPs who can provide value to the portfolio?

Does the fund have LPs that bring credibility to the fund itself?

Does the fund require a high minimum investment?

Does the fund's minimum investment require the LP to take on debt?

Does the fund charge below, above, or standard fees?

There are many funds available to the Limited Partner.

Consider these points in preparing a pitch to an LP for your fund.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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