Paul Lee

Former GP writing about venture from the LP side.

[Paul Lee @iPaulLee]

After spending much of my career as a venture investor and GP, I’ve started writing more about venture from the LP perspective.

A few things I’ve learned evaluating emerging venture managers and building venture portfolios.

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[Paul Lee @iPaulLee]

@kitun Feel free to dm me

[Paul Lee @iPaulLee]

I think many emerging managers frame their fund the wrong way.

They spend the entire meeting explaining why they're a good investor.

Most sophisticated LPs are trying to answer a different question:

"Where does this fund fit in my portfolio?"

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[Paul Lee @iPaulLee]

I don't think the goal is to build a strategy every LP likes.

The goal is to build one that the right LP immediately understands.

Clarity usually wins over consensus.

[Paul Lee @iPaulLee]

I've noticed something interesting listening to emerging managers talk about fundraising.

Many start with a very differentiated strategy.

Six months later, they've incorporated feedback from 50 LPs.

The strategy is better.

It's also much less differentiated.

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[Paul Lee @iPaulLee]

The most successful managers I've met are remarkably consistent.

The pitch is the same in January as it is in October.

Not because they stopped learning.

Because they became clearer about who they are.

[Paul Lee @iPaulLee]

I've found the best fundraising conversations usually aren't about the portfolio.

They're about the LP's portfolio.

That's where conviction gets built.

[Paul Lee @iPaulLee]

Once you understand the role your fund plays, fundraising becomes much simpler.

You stop trying to convince every LP.

You start looking for the LPs whose portfolio is missing exactly what you provide.

[Paul Lee @iPaulLee]

The best emerging managers understand:

Some LPs are commitments.

Some LPs are relationships.

Both matter.

The key is knowing which one you're building.

[Paul Lee @iPaulLee]

One of the most important fundraising decisions isn't who to pursue.

It's who to stop pursuing.

Not every LP belongs in your current fund.

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[Paul Lee @iPaulLee]

The mistake is continuing to spend current-fund time on future-fund LPs.

You end up sacrificing actual closes for hypothetical ones.

That's one reason fundraising often drags.