We created the VentureForward initiative last year with the goal of expanding opportunities for people of all backgrounds to thrive in the venture ecosystem. We believe that education and powerful relationships can increase representation of women, minorities, immigrants, and other underrepresented groups. That’s why we’ve partnered with Greenspring Associates to provide an opportunity for diverse emerging fund managers to have candid conversations throughout our LP Office Hours events.
After a successful launch in San Francisco last July, we hosted a second NVCA-Greenspring LP Office Hours, this time at Openview’s office in Boston. We provide an afternoon of 1:1 meetings, roundtable peer discussions, and a Q&A so that new VCs can get advice from LPs and experienced GPs about the fundraising process and relationship management.
For those who could not make it, we have asked Carmichael Roberts, Founder and Managing Partner at Material Impact, to shares takeaways from his experience hosting 1:1 meetings and moderating the panel and Q&A.
LPs ‘Get Real’ at LP Office Hours
By: Carmichael Roberts
I am pleased to share my experience attending the NVCA LP Office Hours this past November in Boston. Not only did I have the pleasure of moderating the LP panel, but I also participated in the one-on-one sessions throughout the afternoon.
Just 10 years ago when I first got started in venture, events that catered to emerging fund managers from underrepresented groups were virtually non-existent. They were few and far between. The handful that were publicized were low quality, expensive to attend and had very few top-notch LPs in attendance. Today, I am encouraged to see the NVCA taking the lead in organizing events that not only connect women, minority, and immigrant managers with the larger venture and LP community, but where the quality of participants is outstanding. Most importantly, the event was sponsored by the NVCA and LPs so there was no cost to the GPs. All they had to do was get there.
Traditionally, events that bring together LPs and emerging GPs are also structured around “the pitch”. GPs selling themselves and their funds to LPs who are inundated with these kinds of presentations. LP Office Hours was the complete opposite. GPs were asked to leave their pitches at the door. With a focus on learning, the discussion centered around best practices, war stories and advice on forming and strengthening GP and LP relationships. With the pretense of selling yourself/being sold to off the table, it was fun to watch both LPs and GPs truly relax and “get real.” Chatham House Rules were in effect – what was said in the room stayed in the room – so people could talk openly and freely. Real conversations and real talk about what it takes to be successful as a new manager.
After having just raised my first fund for Material Impact, I could truly appreciate how rare and important this opportunity was for the prospective fund raisers in the room. The panel discussion, that included LPs from Greenspring Associates, SCS Financial, Tufts Endowment and Tiger Iron Capital, was eye opening and provocative. Here are some takeaways for all GPs who are raising a fund for the first time:
LPs prioritize the following criteria when evaluating a new manager
- A warm introduction (not through a placement agent)
- Backgrounds / complementary skill sets of the partners
- A differentiated, thesis-focused investment strategy
- Unique partners with unique sets of networks and access to deal flow
- Ability of GP to have a relationship and influence with CEOs
Learn to take “No” the right way
- Even if an LP chooses not to invest, they still want you to stay in touch. Interim progress updates and/or invitations to your annual meeting help to keep you top of mind for when the timing may be right for the LP down the road.
The LP Office Hours event surpassed my expectations. It was encouraging to hear time and time again that you don’t have to be one of the name brand venture capital funds to be interesting in the eyes of LPs. I also appreciated the point that there is too much noise in today’s market for undifferentiated firms to be successful. You have to bring something truly unique to get noticed and considered for investment. That said, being a woman or an underrepresented minority often gives you a distinct view of the world and unique approach to investing, which could actually be a competitive advantage as a GP. Certainly food for thought for LPs to consider.
In 2019, NVCA and Greenspring Associates plan to host three additional LP Office Hours events in three new cities. Do you want to be the first to hear about the next LP Office Hours? Email firstname.lastname@example.org and we’ll add you to our email updates.