Raising Capital from LPs

I had the pleasure of hosting a good friend Ryan Edwards my place in San Diego this week. Ryan is an emerging manager for an early-stage credit fund called Prospeq, in which I am also an investor. He is currently trudging his way to fundraising his first fund, which is a task that every fund manager hates to do. Nevertheless, he has been doing better than most for as long as he has been doing it.

We were talking over my kitchen table about the common responses we both hear from potential limited partners when they reject our advances and solicitations to raise capital. There are about a handful of the same reasons why someone passes, such as - “I don’t typically invest in funds” or “I’m interested but not now.”

We discussed how much of this is excuses vs. do they not believe that I can deliver the return we promised them. That is something we will never know. I do, however, feel like all of the other rebuttals we can create a playbook for if we unpack the value proposition properly.

This is a half-baked thought, but I am going to write more about this over the coming months.