Capital Hacks

1. Oversubscription is Great, But Focus on Quality Investors:
Instead of a quick "yes", prioritize investors who understand your strategy and are in for the long haul. Here's how:
2. Build Relationships: Get to know potential investors (LPs) before the official pitch. Attend industry events, have casual conversations, and showcase your expertise.
3. Focus on Value: Demonstrate a clear path to returns and a strong understanding of the market. LPs want to invest in your vision and ability to deliver results.
4. Transparency is Key: Be upfront about fees, risks, and your investment approach. Building trust is essential for long-term partnerships.

Spend more time invested in potential investor dossiers ... Essentially this is product market fit. Once you identify the best people and create detailed dossiers, especially with the content/press they released in their local media it becomes far easier to close. Finding their private social media and mirroring their sartorial choices has also helped! Make sure you curate your language and your story: simple web scraping and translation can help immensely with this. Hyperlocalising your approach can be beneficial.

Organize an invite-only 2-hour mixer with your LPs and invite on-the-fence LPs and VIPs in the area. Guarantee space for your LPs and cycle out the LPs. No middlemen, no service providers. Maybe invite 10-20% high-potential entrepreneurs who are raising. Get someone else to pay for it. We've done this every three months and it's been a huge draw to engage new potential LPs, meet them, and give us enough social proof to close them. Also, a local billionaire waned to host the 4th one after coming to the 3rd one and loving our guest list. Money can't buy a good guest list.

1. Attend events where you can meet wealth and connect with them.
2. Add value first and then make targeted asks.
3. Add a video to you email outreach. Open rate will increase.
4. Consider direct outreach via mail in some instances. A lot of these families get 1,000 emails a day, easy to get lost. They do not get 1,000 pieces of mail, especially mail that adds value. Also pick up the phone and call!

Step 1: Sell yacht and roll all $$ into your fund/studio.
Step 2: Turn every conversation with investors (even if they're a "no") into more conversations by asking for intros to 2-3 people in their network who might get excited about what you're building.

Use the "permission email" to break the ice with investors, especially if you are doing any cold outreach to LPs, family offices, HNW, etc. What this means: you send them an email stating what you do, and that are not raising capital now, but you will be soon, and that you would like to add them to your company Update distribution list. Why this works: you're not asking for money, you're not asking for their time (e.g. a meeting), you're just asking for permission. Most people will give it. Then follow up by sending them a Company Update every month. It works! Nathan Beckord, CEO of Fundingstack.com

Understanding their priorities and bring resources for them They always need something too. You can re-iterate what they said and do a hypothetical close with their assumptions and terms. It can give a commitment of amount and their decision-making process, and it might take a 15 minute call with the right decision maker.

Create a well-defined process to push your prospective LPs through. For example, use a limited set of focused meeting types so you know where each LP is in the process and what the expectations are for upcoming meetings. An example would be:
1) intro meeting,
2) Impact & investment diligence meeting,
3) operational diligence,
4) commitment meeting (get a firm yes or now).
This way you know what type of questions to answer in each meeting, what materials or artifacts to have. Don't have meetings to "just catch up."

Fund raising is a numbers' game, the most successful GPs are those that can find and convert the most LPs. My hack is; build as large an LP top of funnel as possible then narrow it down for your specific mandate, investment preferences, return expectations and geography. Platforms like Pitchbook are great for getting lists of active LPs, LinkedIn is great for getting lists of angels and family offices.

I wouldn't say necessarily a "hack" but one practice I highly recommend which has saved me a lot of time over my career is to ensure you qualify each potential investor in the first meeting itself. Make sure to understand their investment objectives, check size, allocation strategy, their investment critiera (and how you match up), and if they have allocation slots for the vintage year you are raising a fund. These simple questions can save a manager a lot of time by knowing who to pursue and where to focus their time. I've seen a lot of instances where firms don't qualify investors which leads to non-productive fundraising meetings. Qualify, qualify, qualify!

For us in our private real estate debt fund. We have had a high amount of success creating a template of our 3 most recent deals and showing them where every dollar amount goes. Instead of us explaining what entails private money lending or how our fund works, showing others where every dollars goes, how much revenue is brought with each deal has proven far more successful. Showing instead of explaining has been a growth hack for us. Simplify it rather than complicate it.

Grow an email list and work on amazing projects. My team just bought a hotel in Palm Springs and, while the returns are great, many investors were attracted to the location / vision of the final project. We raised capital through the email list which we had been cultivating for several years and heavily relied on renderings to gain investor traction and committments.

Fundraising is all about building relationships before you need them. My mentor shared with me that building a fund is like taking friends along for a journey. You take your friends on the trip because you want to enjoy their company. Then, once they get to know you, who you are, your abilities, your bona fides, then you are allowed the opportunity to share your dream and how the LP/friend can participate in that dream.

Offer benefits for early commitments.
Example:
- Discounted management fees: Offer a reduced management fee for early investors. For instance, if your standard fee is 2%, offer 1.5% for those who commit within the first month.

Running initiatives in a LPs focus area (Hackathons, Media, Charity, Community Building) can be a great way of getting on a LPs radar before a potential pitch. Having an LP know of you before being introduced can be a great accelerator.

When pitching to LPs, if you have a venture studio attached to your fund: BRAG about the metrics (KPIs) of the best portfolio company (5x Rev etc.). This is powerful over an emerging manager that has no data to present.

Optimize capital growth and management. In my career, particularly at Wealth Management, integrating cutting-edge financial solutions has been crucial. We focus on customizing investment approaches that meet the unique needs of our UHNW clients. This method not only enhances fundraising efforts but also ensures long-term sustainability and growth of the capital entrusted to us.

Leverage Events to make connections. Nowadays it's more important to build trust than ever before. Networking at events can help you connect with investors, sponsors, like-minded individuals, or someone helpful to know in vetting processes. Make sure to find events that promote engagement/connections before, during, and after the event to get the best bang for your time.

Understand investor psychology. You need to quickly show proof you can deliver returns, avoid triggering and red flags up front, and make it safe to say yes fast. Once they are committed to look deeper, nurture their due diligence journey and guide them to turning that low-risk commitment to a wire.

Creating content for social networks, and running a podcast both work very well when raising and building networks and credibility.
Second, credibility matters. Building it in advance makes the raise much easier.

AI-based tools for LP selection from lists of thousands of HNW, Family Funds, and Angels to focus attention on LP mostly to have an interest in whatever sector for fundraising.

Build a pipeline of target investors that are a fit for your fund today and for your next fund size. Make sure you outreach to 50 new firms on a weekly basis with short but thoughtful and specific emails to them. Then follow-up!!! Following up is the biggest hack to get responses, show you are thoughtful and active, and build a relationship

Not really a hack, and it requires hard working:
1. Be one of the first investors of a top startup where everyone would like to get access to;
2. Get access to some top late-stage deals and get potential LPs invest in the SPV.

Behave professionally, spend less time in useless conferences, more on analyzing deals, teams and industries, learn to manage a portfolio properly, don't follow the herd but build convictions out of more than a couple of LinkedIn posts (hey AI investors!), and deliver solid, steady performance.

It's all about 1) Trust, once you have the trust on an EQ level 2) fundraising is easy. I would get to know everything possible about my investor before the initial connection like profiling and then connect with them in the most authentic and honest way. I will sell to their subconscious and not to their conscious mind. It's a mental game.

Whether fundraising or investing, your priority focus should be on delivering XTRAORDINARY Value, not minimum value and maximum gain. The resulting gain will always be equally extraordinary.

Start by identifying investors whose investment objectives align with your goals. Research thoroughly to build relationships based on trust and respect, ensuring you prioritize their needs and approach them with a value-added proposition. Utilize tools like a Family Office List (www.familyofficelist.org) subscription to expedite your research and pinpoint well-aligned investors.

I've found that scheduling a small happy hour/dinner with 12 diverse people in my network has been helpful for building connections, sharing my investment thesis, and securing commitments to my fund.

Creating an extensive set of knowledge owners who are fund experts in a specific industry and deliver not only an incentive model approach but one that accelerates their investments returns for investing in you.

Simple hack but just follow-up and track it. So many people have a lot going on and it's hard to keep track, good follow-up will help both GPs and founders to fundraise. it's a process and if you track it you can improve it. (You can't improve what you don't measure)

Structure your LP outreach approach by LP sector, size, and preference. Make sure that the target LP types you are chasing are a strong fit for your fund strategy, size, and stage. Don't spend time where there is not a clear fit.

Throw intimate but inexpensive events! Invite current LPs and have them invite a friend to a happy hour with 6-10 people. Do intros, have some discounted drinks, and great convos! Then follow up to convert the LPs' friends into LPs!

The Case for Support: Clearly state the vision and need for your project. Test it with your team, trustees, and supporters. Consider framing arguments in different contexts (heritage, arts, community, etc.) to leverage new funding possibilities.
Organizational Experience: Evaluate your team’s fundraising history, strengths, and resources needed for the campaign.

You have to start long before the 2 weeks. Transactional fundraising is very difficult. Fundraising built on relationships is the way to go. Always be in relationship-building mode with potential LPs. Get to know them as people (particularly FOs who may have legacies to protect and specific impacts they want to make) and get to know their investment strategies. That will maximize the potential of getting to yes in a short time frame.

Authencity and sharing what you think rather than what you want. If you are authentic, law of attraction helps your behavior in a manner that people see value and willing to work with you rather than just invest.

Follow up, Follow up and Follow up for Receiving responses from Investors.
Keep the email really short and only mention the main info, how much you're raising, what problem you're solving, and mention key metrics and attach the pitch deck as a pdf.

Actually used for both Fundraising and Investing:
Network: Always be Networking
Honesty: Be honest with you and who you meet about what you're building
Hustle: Don´t stop; Don't quit. You'll make it happen!

1. Building a Deal Flow Dream Team:
Here's how to attract top entrepreneurs:

• Track Record Matters: Show you have a good eye for talent by highlighting past successful investments.
• Be a Partner, Not Just an Investor: Offer mentorship, connections, and support beyond just funding. Great entrepreneurs seek strategic partners.
• Network Like Crazy: Attend industry conferences, join angel investor groups, and connect with other VCs to uncover promising deals.

2. Alpha Returns: It's a Marathon, Not a Sprint:
Generating alpha (beating the market) is about making smart, calculated bets over time. Here are some tips:

• Diversification is King: Don't put all your eggs in one basket. Spread your investments across different sectors and asset classes to manage risk.
• Stay Focused: Don't chase every hot trend. Develop a clear investment thesis and stick to it, but be flexible enough to adapt to changing market conditions.
• Continuous Learning: The market is always evolving. Constantly educate yourself on new trends, technologies, and industry developments."

To generate alpha returns and create a deal flow of super-successful entrepreneurs, these key strategies need to be followed:
Networking and Relationships: Build strong relationships within the entrepreneurial ecosystem. Engage with incubators, accelerators, industry leaders, and VCs to get early access to top talent and deal flow.
Sector Focus: Point out high-growth sectors then specialize on them. Gain great expertise in the field so that you can more effectively identify and assess those opportunities with greater potential.
Proactive Sourcing: Don’t just wait for inbound opportunities. Hunt for start-ups actively, attend pitch events, or use data-driven tools to spot promising businesses before they go mainstream.
Value-Add Approach: Capital is not the only thing you should bring. Provide strategic guidance, and operational support as well as your network access. Entrepreneurs are seeking smart money that moves their growth rate faster.
Rigorous Due Diligence: Startups should be verified through a full-scale investigation process to know whether they are viable or not scalable. Concentrate on team’s ability market size competition structure financial health among others
Flexible capital structures: Different investment structures such as equity/ debt/ hybrids can be used to meet different business needs and maximize returns.
Monitor & Support post-investment involvement must be maintained.

Pre-seed / seed stage

• Look towards mostly the team, problem statement, solution, and why they are doing it.
• Many founders will be starting up after leaving high-paying salaries, they don't do it, if they don't see a big opportunity ahead.
• Here looking for numbers doesn't make sense, since founders are getting started
• Keep cheque sizes as small as possible max up to $ 1 million, here the aim is to give a headstart to them.

Pre-Series A to Series B

• Now focus should be mostly on Traction, number of users, Revenue avenues and Business model.
• See their spending patterns and how the growth has been so far, unit economics are important, here depending upon the business you can take the cheque size up to $5mn - $50mn

Series C and Beyond

• Expansion plans, monetization strategies, product lines, growth rate, market share, IPO plans, etc.
• Go deep on the startup growth strategies to capture the market, revenue, churn rate, ARR, and focus business areas, there is no limit on the cheque size it starts from $50 million, do your due diligence and take the call.
• To be on safer side, always deploy capital in tranches"

To build a robust deal flow of top-tier entrepreneurs, focus on creating and nurturing a powerful network within the entrepreneurial community. Attend industry events, host exclusive meetups, and actively participate in relevant forums. Position yourself as a value-add investor by providing more than just capital; offer mentorship, strategic guidance, and access to a wider network. For generating alpha returns, adopt a data-driven approach to identify emerging trends and undervalued opportunities. Diversify your investments across stages and sectors to mitigate risk and enhance the potential for outsized returns. Always be proactive in monitoring and supporting your portfolio companies, ensuring you add value at every stage of their growth.

Offer mentorship or advice: Successful entrepreneurs are busy, but many are willing to help the next generation. Share your expertise and build trust. They may think of you when they encounter a great opportunity.
Become an industry thought leader: Write articles, give talks, or host podcasts on topics relevant to entrepreneurs. This establishes you as someone who understands the space and attracts promising founders looking for investment.

Join exclusive networks, attend high-profile events, and build personal relationships to connect with influential entrepreneurs. Publish insightful content and host webinars to establish thought leadership. Employ AI and data analytics to identify high-potential entrepreneurs and investment opportunities. Conduct thorough due diligence, diversify your portfolio, and actively manage investments to add value and enhance returns. Stay informed on market trends, assess risks continuously, and use hedging strategies to protect against volatility.

I've gotten some great deals because of referrals and warm intros. Being introduced to new companies and founders as a "value-adding" investor is always a win especially since I'm active in the impact space.

Post intros- Carrying on conversations and diligence on startups that enter our pipeline like this seems 10x easier because of the assurance that the companies are verified high-quality leads. Whether they make it to the portfolio or not, I am always excited to track their growth journeys.

It's all about leveraging one's ecosystem! Be it your advisors, co-investors, syndicates, associations, incubators, accelerators, studios, and other organizations that can share a curated set of deals cut down the cycle time for due diligence and focus on high-potential companies to consider for investment.

Create an innovation hub, or incubator space, that provides resources to early-stage companies and entrepreneurs. This includes wet labs, tech labs, a co-working office, entrepreneurship accelerator programs, and access to networks and experts.

I created the Magnetic Pitch Method. While it helps entrepreneurs craft a really well-structured pitch with all the “table stakes” most investors look for, it equally helps capital allocators pre-diligence a startup as they observe how they progress. It’s a brilliant way to see how coachable and resilient the founding team is.

Super successful entrepreneurs care. They care about what they're doing and problems they're solving and what their impact is going to be. Mirror that. Be really clear on your fund's mission and thesis as step 1. Step 2 is making the mission memorable. No more than one sentence that your dad could remember. If your dad or grandma couldn't describe the thesis, it's not memorable enough. It's not distinct enough.

As Kevin mentioned, being conservative with multiple is key, but also...make sure the EBITDA or whatever metric you are using is real! Adj EBITDA or EBIT or EBITDAR shouldn't scare you off, but make sure you understand the bridge from actual operating income/loss to whatever metric they are trying to base the multiple on.

Find ways to add value to them first. Build a real relationship and don't overwhelm them with info. Use bite-size sizzle until they are interested and have the time to pay attention before you pitch. For investing, I have an opportunity you write off 85% of the investment again ordinary earned income.

Market research! Do some primary research to better understand the consumer markets that you're investing in, not just looking at passive analytics. Alpha in your research creates alpha in your returns.

Go to places that have few or unsophisticated VCs on the ground and have strong engineering talent. IE Look into Southern Adriatic Europe.
Use fractional cfos & operating partners to clean up the muddy gem investments and to shepherd the founders & their untested business models.

If you're investing for the long term, focus on cash. Cashflow specifically. Invest in startups and companies that generate cash or have a very concrete plan to generate cashflow. Don't get caught up in valuations, since valuations might not be worth the bytes they're stored in.

I know it's painful, but you have to be out there. The best ROI deals come from unexpected sources: old friends and new places. Old friends are easy to create: just be a good person, have fun with others, and check-in with people time-to-time. For new places, look where smart people hang out: Reddit forums and Discord servers are strange but awesome places to meet super-ambitious founders.

Work with local universities. Perhaps with the engineering dean, business school dean, or university president. A great source of new deal flow. And a great venue for getting your brand out there.

Diligence your entrepreneurs for a VC portfolio by doing real work with them; in particular, focus on customer development interviews. You'll learn how important the problem is, and how quickly the entrepreneurs learn.

Invest in AI tools that predict market shifts and emerging trends before they become mainstream. Use these insights to target entrepreneurs working on cutting-edge solutions in nascent markets, giving you a first-mover advantage.

Create a community of high-quality entrepreneurially minded professionals by sharing useful insights to network you've grown organically. We've done this with our fund and are converting a lot of stellar mid-career professionals with deep technical experience and sharing insights on how to start high-quality businesses in the Deep Tech Space.

Build good relationships with other fund GPs and LPs and find ways to add value to them and share deal flow. Also ask your portfolio founders to introduce you to other stellar founders building companies as good founders tend to know others like them :)

Spot the 'pillars' of the project. Everything that has to be in place for a particular project to succeed and make sure they are standing on the hard soul. It can be clients, partners, technology, etc. If there are necessary pillars in place and they need 'just' money or smart money, then it's a potentially good investment. Also envision will they have (either with your help or other smart money, partners) the next pillars necessary when they will be making the next step.

Always looking for Exceptional Founders! At Seed and Series A they are accessible and reach out to you. Once capital starts flowing to them freely, allocations become difficult. Grab them early by seeing traction.

Focus on the best teams (we like second-time founders but don't invest exclusively in them) looking to solve a large TAM using digitization to make industries more efficient and processes more scalable and replicable. Business models can change. Make sure a company is capitalized enough to get traction.

Use DealPotential (investment intelligence platform) to evaluate both what's currently trending (investors investing) markets, and companies; invest internationally; Stick to industries you know well.

Serving the founders and helping their growth in your portfolio is the best way to access brilliant startups to invest.
Continuous networking and thought leadership activities will help you attract the right talents.

Finding unique outlier events to network. Don't go to the VC event, go to the adjacent industry event that would connect to VC, and make the highest level relationships you can there. It will then bridge you to any channels you want.

Combining a Venture-Builder Incubator/Accelerator + VC Fund hybrid model to co-build tech companies to better help them get through the valleys of death, especially for hard-/climate-tech companies that face greater commercialization and capital raising challenges.

If the company is growing super fast, invest in them. For example, one company grew from 0 to 1.5 billion in assets in 6 months, look at top accelerator programs to find early-stage investment.

This sounds really simple but in order to consistently do great commercial real estate deals you must be able to structure a deal with a seller in a way that makes it a win for both sides. Focus on quality not quantity. You need to have a world-class due diligence process to drive to a smooth transaction and ensure you're going to be able to deliver alpha returns for your investors.

It's all about creating the infrastructure to support your investments. Having a coalition of other VCs, Investors, Accelerators, etc means you have greater deal flow and access to resources for the founders you invest in. BTW, we are pre-seed/seed stage investors. This doesn't work and/or is not required for all stages.

To generate deal flow - takes many many years. Be an expert in the field you are investing in. Share your network with your entrepreneurs. Spend 1:1 time with entrepreneurs helping them with their pitches, fundraising, operations, etc.

Become an expert in a critical element of startup launch, growth and exit. For example, we are healthcare technology commercialization experts, and we know how to build the evidence for technology adoption and build the connections to get in the door and secure customers.