What questions should an LP ask an emerging venture manager?
The questions that separate a credible emerging manager from a good pitch, organized around the investment case, the firm behind the fund and the fit with your own portfolio.
How do you evaluate a first-time fund manager without a fund track record?
No fund-level record is not the same as no evidence of investment judgment. What to look at instead when a manager is raising a first fund.
How to read a prior-firm track record, including SPV and angel deals
A prior record is useful only if the manager may present it, can prove their part in it and labels it honestly. How to read attribution, portability and deal-level summaries.
Operational due diligence for emerging venture managers, what to check
How to review a first-time fund as a running business: service providers, controls, reporting, systems and insurance, and how to tell a policy from a practice.
What to ask for in a venture fund's data room
What a well-organized venture fund data room contains at each stage of diligence, what it tells you about the manager, and what should never be in it.
How to run references on a venture manager
Which references to call, what each kind can and cannot tell you, and how to find the off-list conversations that matter most when evaluating an emerging manager.
How many portfolio companies should a venture fund have?
How to test whether a manager's target company count is financeable: the arithmetic from fund size to check size, and what the answer should look like.
Is a venture manager's ownership target realistic?
How to test a manager's target ownership against the checks the fund can write, the valuations it will meet and the dilution that follows.
How much should a venture fund reserve for follow-ons?
There is no right reserve ratio. How to test whether a manager's reserve budget fits the strategy, and why the follow-on policy matters more than the number.
Can a venture team carry its board load?
A three-number test any allocator can run from a deck: board seat practice, target company count and team size. Plus GP load, the capital each partner must deploy per year.
How to tell if a venture fund is deploying on plan
How allocators can read deployment pace, compare it with the fund's original plan, and tell deliberate patience from drift.
Should you re-up when a manager raises Fund II?
How to decide on a re-up when an emerging manager comes back for Fund II: what Fund I evidence to review, and what the next fund's plan should explain.
What are normal venture fund fees and carried interest?
How to read a venture fund's management fee and carried interest beyond the headline rates: fee base, step-downs, offsets, the waterfall, hurdles and clawback.
How much should a GP commit to their own fund?
What the GP commitment is, the typical range, cash versus fee waiver, and why the same percentage means different things for different managers.
Side letters and MFN rights, what LPs typically negotiate
What LPs ask for in side letters, which provisions change how a fund operates, how most-favored-nation elections work, and how co-investment rights range from soft to hard.
Key person and succession terms in emerging funds
What a key-person clause does, why it matters even for a solo GP, and the practical continuity questions an allocator should ask beyond the legal terms.
What does an LP advisory committee do, and should you sit on one?
What an LPAC actually approves, who usually sits on it, what a seat asks of you, and how to judge an emerging manager's governance structure.
How many venture funds does an LP need to be diversified?
Why there is no single right number of venture funds, the four kinds of diversification that matter, and how to size a program to the commitment you can sustain.
Should LPs allocate to emerging venture managers?
What Colibrí Institute research found across 2,471 U.S. venture funds, what it does and does not show, and how to decide whether emerging managers belong in your program.
Which benchmark should an LP use for a venture fund?
Vintage-year peer benchmarks, public market equivalents and absolute targets, what each answers, and why early quartile rankings are unreliable.