Tips on raising a venture fund

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At Affinity, we’re fortunate to work with—and be in the same industry as—a strong group of talented women in Venture Capital. We partner with Women in Venture Capital: Europe (WVC:E) because of their commitment to promoting inclusion, empowerment, and the integration of VC globally. By participating in community-driven events like the WVC:E Summit 2023, we aim to help increase representation of women in VC across the ecosystem.

Our roundtable during the summit ‘Tips for Raising a Venture Fund’ centered on sharing strategies to fundraise in the current economic climate and featured speakers:

  • Uzma Rafiq, Senior Marketer, Affinity
  • Elodie Donjon, Investment Manager, European Investment Fund (EIF)

Joined by participants who have successfully raised millions, we were thrilled to act as a center point to bring this group together to discuss new ways to approach fundraising. 

Here’s a selection of the insights they shared:

Gender representation at VC firms is imbalanced, but improving 

European Women in VC recently released their Diversity in VC Report, which revealed that only about 15% of General Partners in Europe are women. Furthermore, they found that LPs who make decisions are still predominantly male, and that only 10% of women at LPs have influence and decision-making power. As the VC space is primarily relationship–driven, this disparity creates challenges for female fund managers seeking to raise capital. 

At the same time, the report showed that women-led firms are increasing. Paris-based Revaia raised €250m, while Crowberry became Iceland’s largest fund ever, at $90m. Some funds are also focusing on solely backing female founders, which should begin to address the uneven playing field. As one attendee explained during the roundtable, investors are typically more inclined to invest in people they relate to. This is a challenge for female founders when VC remains a male-dominated industry. 

Roundtable participants shared experiences of being the only female VC in the room. One suggestion for creating more gender equality was to split event invitations 50/50 between male and female VCs. They agreed that while better gender representation in Venture Capital is certainly slow moving, every step counts. As one roundtable participant shared, “Even if women are doing smaller tickets, it’s important to bring them into the fund as an LP. Otherwise, that representation stays low.” 

Fundraising takes time, regardless of the economic cycle 

After a blockbuster few years, many firms are finding it challenging to fundraise. Exit activity dropped by 90% in 2022 YoY; LPs have less capital to commit and those that do are increasingly moving their money to other assets. 

Roundtable participants agreed that when it comes to fundraising, time is an incredibly valuable resource. For example, upon developing their fund investment strategy, GPs invest considerable time and resources in identifying and engaging with potential new investors, as well as working to strengthen relationships with existing investors to make sure that they are able to raise their desired amount of funds swiftly and succinctly. 

One attendee shared how securing cornerstone investors is usually the toughest–and most timely– stage of raising a fund. Cornerstone investors are those who commit to a certain amount of investment in advance. They shared how investors will often say, “Let’s chat when you have your cornerstone.” Another attendee added how it’s “sometimes hard to know who will be your cornerstone because there’s not much info out there on their ticket sizes.”

There are other time-consuming tasks that a relationship intelligence CRM like Affinity can help automate. For instance, identifying the right potential LPs is typically a highly laborious process of setting criteria, creating and maintaining lists of matching LPs, and coordinating lists with other team members. Another laborious process is manually managing contact lists, outreach or engagement history, and tracking outreach success in Excel results. Not only does this require hours of intense focus, it also leads to gaps in follow-up and engagement.  


Relationship intelligence is key to maximizing fundraising impact 

Our roundtable participants explained that when fundraising, it’s paramount to have a solid network with warm introductions. Relationship intelligence ensures that connections with current investors remain strong and makes new investor relationships easier to discover and develop. 

There are a couple ways to leverage Affinity’s CRM to support both the fundraising stage of a fund and the overall management of relationships with LPs across the firm. 

  • Prospect for potential LPs by automating and consolidating the collection of network and activity data, and by facilitating the ability to create, track, and filter LP selection criteria such as industry reputation or potential investment size. 
  • Use your firm’s collective network to drive better outreach and find warmer introductions by understanding the strength of all existing LP relationships. 
  • Keep in touch and provide insightful messaging to LPs at every stage, through automated reporting and CRM functionality built to drive stronger relationships. 

When building one’s network, our roundtable participants shared two critical best practices. One suggested leaning into the network of the senior team and getting warm introductions. Another participant pointed out, “LPs convince other LPs, and so if you start with more women, they’ll bring in more women.” 

That’s a wrap. Where will you go next?


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