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// By Diane Woo
How to Raise Capital for Funds, From a VC When it comes to raising capital for VC investments, entrepreneurs will generally receive capital through one of two primary avenues; direct investments from a VC’s own capital, or from a fund.
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hat most entrepreneurs don’t realize, however, is that raising capital for an investment fund as a VC is one of the most challenging and tasking parts of being a venture capitalist. It takes a certain degree of skill, as well as a strong capability for networking and building relationships with other VC, in order for an investment fund to gain the necessary attention from the right investors. For over 15 years, I have honed my knowledge and skill set as a coach and mentor to hundreds of businesses and startup ventures, as well as an investor to dozens of additional companies and VC funds throughout the United States. As a result of my experience, I have been able to hone my abilities as a venture capitalist and have helped to fundraise millions of dollars for a broad array of VC funds targeting the retail tech, medtech, consumer goods, and restaurant industries. In this article, I want to help highlight the skills and abilities you will need as a venture capitalist or investor to help raise capital for a VC fund. Scale to a level where VC fundraising is necessary
First things first: before you begin attempting to raise capital for a VC fund, you need to ensure that you — as an investor — are prepared for the challenges
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and hurdles that come with fundraising. Depending on your firm, along with any firms or Limited Partners (LPs) you or your firm are partnered with, you will likely need to give those LPs or other partners anywhere from 90-180 days’ (or 3-6 months) notice of your fundraising initiatives. From there, you will need to prepare material and data to present to your partners so that they can perform their due diligence. Once the official fundraising begins, expect for it to take anywhere from a few weeks to a few months to finalize. This time frame also depends on the type of fund you plan to raise. Newer funds often take longer to raise capital than those with proven successes in the past. If your fund is newer and doesn’t yet pos-
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