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Volume #23 TL;DR:

• New website, Sydecar Panel, Podcast Appearance

• The main question that needs to be answered is: How should the limited time of the first call be utilized in such a way that it opens the door for further exploration?

• We back people. This is the very first and most important hurdle Emerging Managers need to take.

• GPs have 30min to give the Limited Partner a true glimpse of the magic they possess. It is an insanely limited amount of time to tell another person how different you are.

• A pitch deck does not signal as strongly if you are a special Emerging Manager as a conversation would.

Table of Contents

• Embracing Emergence Website

• Sydecar Session: Standing Out as an Emerging Manag …

• Building Bridges between Limited Partners and Emer …

• How Limited Partners Think About The First Call

• The Pitch Deck on the First Call

• When To Share the Pitch Deck

• Let Me Know If I can Help

Embracing Emergence Website

I recently launched a website for Embracing Emergence. I wanted to make a space for both EMs and LPs to find all resources Embracing Emergence can provide at this point in one central spot. You can find it here.

Sydecar Session: Standing Out as an Emerging Manager - The Pitch

I got to speak with my friend Jamie Rhode and Jenny Barba about how Emerging Managers can refine their differentiation. Thank you for having me, Sydecar.

Building Bridges between Limited Partners and Emerging Managers

I got to sit down with Brian Bell on the Ignite Podcast and share about my path into Venture, my thoughts on the synergies between Emerging Managers and Limited Partners, and how both sides can keep fostering convergence. Thank you for having me, Brian!

How Limited Partners Think About The First Call

Last year I started a small WhatsApp group exclusively for Limited Partners who actively invest in Emerging Managers. The group has grown to 50 LPs, but has remained to be a tight-knit community of people, who are all passionate about backing exceptional people.

As I was reflecting about this newsletter volume, I wanted to ask my peers on their thoughts on the main elements that make up the first call between Emerging Managers and Limited Partners.

The main question that needs to be answered is: How should the limited time of the first call be utilized in such a way that it opens the door for further exploration?

The first thing I would like to emphasize is that this is not the key question only Emerging Managers are trying to solve for, as Limited Partners we have to answer the exact same question. There are several obvious reasons:

1. The Emerging Manager wants to secure the chance to keep clarifying the unique value and differentiation of their fund. You can’t communicate all of it in 30min.

2. The Limited Partner needs to utilize their time in the most efficient way. The first call should clarify as much as reasonable, if a second call is necessary.

3. Both need to determine if there is indication for long-term alignment.

We can dive deeper into this by looking at WHAT Limited Partners are trying to find out in the initial call and secondly by HOW the initial call can be structured.

For this, I polled the LP community surrounding Embracing Emergence (thank you all for answering my questions).

And here are the results:

Take this with a grain of salt, because the poll is positioned with a more simplistic answer than what I would like. But the intent of the question was to get at the core of what Limited Partners are trying to achieve on the first call with GPs. There are layers to what LPs are looking for on a first call, but the bottom line is: people.

A large majority of Limited Partners (and they all actively invest) answered that they are looking to confirm/determine that the GP they are talking to is a special person. This is an obvious, but not often transparently talked about fact of investing in Emerging Managers. We back people. This is the very first and most important hurdle Emerging Managers need to take.

What Emerging Managers should take away from this is that they have 30min to give the Limited Partner a true glimpse of the magic they possess. It is an insanely limited amount of time to tell another person how different you are.

But why do Limited Partners care so much about finding a “special” Emerging Manager? Well, being a top decile Emerging Manager is an impossible job. I think that’s something we can all agree on. And to do something impossible, you need to be a person, who has something that almost nobody else has. Otherwise it wouldn’t be impossible, it would just be hard.

Another conclusion that should be noted based on the responses from fellow Limited Partners: have an organic conversation as your first call. This is the time to tell your story, but to also show who you are. It is often said that for Fund 1, Limited Partners invest in your story. That is true, but we also back your character, your relational abilities, your professional expertise, your value hierarchy and how you perceive the world, etc.

A conversation of mutual questions and answers is the primary way a first call should be utilized. The LPs’ job is to find out whether or not the Emerging Manager is unique and different. And the EMs’ job is to show that they truly are - not based on a strategy on a pitch deck, but based on who they are.

The Pitch Deck on the First Call

This underlines the previous point: having an organic conversation as the first call is key. Talking through a pitch deck is not just “neutral” in value on the first call, it is something that adds negative value to potential of having a follow-up call.

Why? The pitch deck steals time away from the actual purpose of the first call that the Limited Partner is pursuing. A pitch deck does not signal as strongly if you are a special Emerging Manager as a conversation would. I’m not saying that a pitch deck doesn’t signal anything at all. But it ranks below a conversation in signaling magic.

So, when should you share the pitch deck? See below.

When To Share the Pitch Deck

If the first call is not the most valuable time to walk through the pitch deck, then when should you share the pitch deck with a Limited Partner? The answer is fairly obvious: before the first call.

What this does not mean however, is that Emerging Managers should always share their deck alongside an email introduction!!!

I also receive several warm introductions to Emerging Managers with the pitch deck already included. I find it to be a waste of strategic information.

Emerging Managers should share their deck prior to an introductory call as an additional strategic step to share information about their fund and to spark curiosity of the Limited Partner to learn more. Most Limited Partners said that the purpose of the initial call is not to find out what your fund is about, i.e. fund size, industry, stage, etc. That is what your deck is for. And the deck should indicate how you as the person aligns with this fund strategy.

Let Me Know If I can Help

If you want my opinion on anything that is “First-Call-with-an-LP” or “Sharing-My-Pitch-Deck” related, please just respond to this email. I can’t promise in-depth responses, but if I have a short input I will respond!