22 Jun 2023

Reflections on the BVCA’s First Time Fundraising Forum

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First time fund managers gathered for a half day forum this week, to hear from investors, network with peers, and learn from managers, who have done it before.

With established teams finding it more challenging to fundraise in the current climate, managers raising their first fund need to stay focused and resilient to realise success. With a lack of track record, proven history of success, industry connections, and brand recognition, the obstacles are plenty. But my main takeaway from the BVCA’s First Time Fundraising Forum was that it’s not impossible.
 

Identifying investor prospects

There are more managers competing for the same LP attention, and while many investors are reupping existing relationships or allocating to trusted names, it’s not all doom and gloom. As one industry expert put it “there seems to be a reset in the industry and we’re just coming out of a massive boom”. The message was not to be fearful of the current macroeconomic environment, there’s dedicated capital available to first time and emerging managers. The key of course is pinning down investors, who have been active in first time funds and knowing where to find those specialist LPs with dedicated first-time and emerging manager programmes.
 

How to stand out from the crowd?

Differentiation is key, although as delegates remarked you can’t be too unique, it’s a bit of a balancing act. Really think about your USP, what are you offering that is truly different? Is it the companies you invest in, is it your value add? Build on the strengths of the team, your personal track record, and your expertise. LPs are drawn to that ‘hungry energy’ and motivation, that first-time managers have. Data shows that this, in part, contributes to emerging managers outperforming established ones. Lean on this and use this to your advantage.
 

Embedding ESG

As family offices are becoming more sophisticated and as the younger generations are coming through, how you approach ESG is crucial. LPs don’t expect you to have everything in place and are willing to work together with you on your ESG journey, but you need to have an idea of your roadmap and know where you are heading. As one investor put it, if you have an ESG strategy right from the beginning, it will naturally drive impact. You need to embed ESG in all aspects of the business and you need to be able to demonstrate how it’s impacting decisions.

The BVCA offers practical guides, training courses and networking events to support first-time and emerging fund managers. Please get in touch, to explore opportunities available within membership, and good luck out there!

 

Denise Typl
Membership Manager, BVCA


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