The document discusses managing relationships with venture capital funds. It provides tips for fundraising meetings, including being organized, treating potential investors as colleagues, and focusing on how the fund can outperform others. It also discusses trends in the venture capital market, such as more funds raising money in Europe and the rise of pension funds as a source of capital. Pension funds in countries that invest more in venture capital, like the Netherlands, have seen higher returns than those investing more in bonds.
5. 5
More liquidity for funds under $150MM
Growth of European venture capital
Growth of corporate venture capital
Tech IPOs creating individual liquidations
Exited startup founders becoming managers
MARKET CONDITIONS FOR VC FUNDS
MONEY2020: MANAGING VENTURE RELATIONSHIPS
6. THERE ARE OVER 490 VENTURE
CAPITAL FUNDS UNDER $200MM
IN SIZE THAT HAVE RAISED SINCE 2011
https://bit.ly/1GvikTq
6
7. EVERONE AND THEIR MOTHER HAS A FUND.
7
Everyone
and their
mother
has a fund.
8. 8
OF FUNDS
RAISED IN EUROPE IN 2017
WERE FIRST TIME FUNDS.
FRANCE
CLOSED
MORE DEALS
IN 2017 THAN
THE UK...
FOR THE FIRST
TIME EVER.
MORE THAN 200 US INVESTMENT FUNDS
PARTICIPATED IN FUNDING IN EUROPE
UP FROM 103 UNIQUE INV. FUNDS IN 2013
THE RISE OF EUROPEAN VENTURE
MONEY2020: MANAGING VENTURE RELATIONSHIPS
25%
#HUSTLE
$4M
MEDIAN SERIES A
IN EUROPE
$5.5M
20172016
9. 9
Pitchbook and Atomico 2017
EUROPEAN STARTUP DEALS
MONEY2020: MANAGING VENTURE RELATIONSHIPS
12. 12
OUR FUND (A “FUND OF FUNDS”)
MONEY2020: MANAGING VENTURE RELATIONSHIPS
13. 13
REGION VC FUNDSIZE OUR COMMIT % OF THEIR FUND % OF OUR FUND
US- New York 30MM 10MM 33% Less than <1.0%
US- New York 100MM 10MM 10% Less than <1.0%
UK 60MM 7.5MM 12.5% Less than <1.0%
EU- France 60MM 7MM 12% Less than <1.0%
US- New York 30MM 5MM 16% Less than <1.0%
UK 60MM 10MM 16% Less than <1.0%
US- California 30MM 5MM 16% Less than <1.0%
Switzerland 150MM 15MM 10% Less than <2.0%
EU-Netherlands 150MM 10MM 6.6% Less than <1.0%
EU-Romania 100MM 10MM 10% Less than <1.0%
Switzerland 100MM 10MM 10% Less than <1.0%
FOF FUND PLACEMENT SNAPSHOT
MONEY2020: MANAGING VENTURE RELATIONSHIPS
14. VC FUND MANAGER DO’S
14
Have a specialized strategy or focus
Explain how your VC fits a “MMF”
Market-Market Fit vs. “PMF” Product-Market Fit
Show Your Ability to Pick Winners
Defend Your Equity Positions
MONEY2020: MANAGING VENTURE RELATIONSHIPS
15. 15
Do your emails read like a
fund manager or a college
english essay on imperialism?
Proprietary Dealflow? GTFO.
Academic Partnerships = Not Leverage
Get into the weeds of one product or company
MONEY2020: MANAGING VENTURE RELATIONSHIPS
VC FUND MANAGER DON’TS
!
16. 16
Be organized
Ask for check-ins - don’t assign them
Obsess over fund quality (money out)
Set clear milestones
Remember, fundraising is a sport
… and this probably isn’t your last fund.
GENERAL OBSERVATIONS
MONEY2020: MANAGING VENTURE RELATIONSHIPS
18. 18
CAPITAL MEETING OR MEETING PREP
MONEY2020: MANAGING VENTURE RELATIONSHIPS
Understand your firms margins and costs (fees)
Know your “ticket” or investment sizes by heart
Treat future LPs as colleagues (if you like them)
Don’t fake urgency
Be genuine. Most FOFs have seen every trick in the book.
20. SUMMARY OF TIPS
20
Be honest and genuine about your mission and why
Be organized! Run fundraising like a process
Treat your fundraising like a routine and think long term
Focus on how your fund can outperform others (advantage)
MONEY2020: MANAGING VENTURE RELATIONSHIPS
22. 22
PENSION FUNDS
FAMILY OFFICES
INSTITUTIONS
CORPORATIONS
WEALTH INDIVIDUALS LP Capital Sources
If you understand your LP,
you will better know how to
manage their expectations
and their shareholders
WHERE DOES VENTURE COME FROM?
MONEY2020: MANAGING VENTURE RELATIONSHIPS
24. 24
NORTH AMERICAN PENSION FUNDS ACCOUNT FOR
HIGHEST GROWTH IN 2011-2016 OF 6.7%
THE WORLDS LARGEST
PENSIONS ACCOUNT
FOR $15.7 TRILLION
ASSETS UNDER MANAGEMENT
PENSIONS IN EUROPE & ASIA
INVEST LESS IN VENTURE AND SHOWED
LOWER RETURNS OF 2.8%-3.1%
$15,700,000,000,000
Assets managed in pensions
Countries which invest into venture capital are
producing better returns than those investing
more into Bonds
THE RISE OF PENSION IN CAPITAL
25. 25
COUNTRY 2007 2017 CHANGE
Netherlands 126% 194% +68%
UK 88% 121% 33%
US 106% 131% 25%
Canada 83% 108% 25%
Finland 71% 22% 22%
Switzerland 112% 133% 21%
Hong Kong 35% 49% 14%
Willis Towers Watson, 2018; * in local currency
PENSION ASSETS vs. GDP CHANGE*
MONEY2020: MANAGING VENTURE RELATIONSHIPS
26. 26
MARKET TOTAL ASSETS (2017) USD BILLION ASSETS/ GDP RATIO %
United States 25, 411 131.2%
U.K 3,111 121.3%
Japan 3,054 62.5%
Australia 1,924 138.4%
Canada 1,769 107.8%
Netherlands 1,598 193.8%
Switzerland 906 133.1%
Willis Towers Watson, 2018
COUNTRY % of COUNTRY GDP
Netherlands 193.8%
Australia 138.4%
Switzerland 133.1%
United States 131.2%
U.K 121.3%
Canada 107.8%
Japan 62.5%
Ranked by % of Assets v. % of Country GDP Ranked by $ of Assets in USD
Most Money in Pensions: United States
Most GDP as Pension Assets: Netherlands
MONEY2020: MANAGING VENTURE RELATIONSHIPS
PENSION ASSET SIZE BY COUNTRY
27. 27
MOST % GDP IN
PENSIONS:
NETHERLANDS
MOST $
(CAPITAL) IN
PENSIONS: U.S
LEAST
CAPITAL
USED OF
GDP: JAPAN
Japan and Netherlands typically invest 15% more
into bonds than equities, compared to other
countries. They produce returns 1/2 of countries
which invested more.
28. 28
Smaller positions in startups, earlier stage
Liquidity events and likeliness of follow-on
Specialized approach to selection
Overall portfolio position (i.e shutdowns or coverage)
Manager preparedness for market shifts
OTHER TRENDS LPS LOOK FOR
MONEY2020: MANAGING VENTURE RELATIONSHIPS
29. 29
Sharing news and information
Extends invites or introductions
Gives clear feedback even if opinion is different
Offer other team members as resources
GOOD SIGNS OF LPs
MONEY2020: MANAGING VENTURE RELATIONSHIPS
30. MONEY2020: MANAGING VENTURE RELATIONSHIPS
DESIREE CACHETTE
CACHETTE CAPITAL MANAGEMENT
Prinses margrietplantsoen 33,
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Nederlands +31 615 411 453
70 Washington Street, Suite 303
Oakland, CA 94607
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30
FOR MORE INFORMATION SEE:
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