Over the past decade, I’ve (somewhat accidentally) put together a syllabus on how to launch, manage, and invest a VC fund. Almost all my research is also relevant to private equity.
I’ll start with my series on building your career in private equity/VC:
- Reading list for working in private equity/venture capital, including all of the major online communities, programs, and educational options for people studying VC
- How to win consulting, board, operating, and investment roles with private equity and venture capital funds (video)
- How to find a job as a VC scout
- How to get a job in venture capital
- VC recruiters list and compensation data
- How to negotiate a partner role at a VC or private equity firm
- For emerging VC and private equity investors: accelerators, platforms, communities, and incubators
For building your own investment management firm, I suggest you walk through the 14 steps below:
1) Determine your strategy.
- Should you be a momentum or a value investor?
- Should you invest in follow-ons, and if so, how?
- Does Your VC have an Investment Thesis, or a Hypothesis?
- Should your fund use Revenue-Based Investing or traditional equity VC?
- Flexible VC, a New Model for Companies Targeting Profitability
- What Are the “Jobs To Be Done” of an Investment Manager? What jobs are you doing for LPs?
- How do you differentiate? See How to get superior returns in VC
- What geographies will you focus on? See Why venture capitalists are investing in international startups.
- What is your culture? See Design your company culture like the world’s largest hedge fund.
- What is your strategy for working with universities?
- What is your diversity strategy? See and Why are venture capitalists (76% white men) ignoring the future?
- Exploring Evergreen Funds with a VC Investor Who Raised One (written by another investor)
- ESG in Venture Capital: Interview with Blue Future Partners (VC Fund of Funds)
2) Assemble the team.
- Should you co-found a company with your friend? And how do you split the equity?
- How to Negotiate a Partner Role at a Venture Capital Firm, or Recruit a Partner
- Venture Capital compensation data and recruiters list
3) Launch.
You will next have to address the operational issues: org chart, incorporation, financial structure, and so on. See Checklist for Launching a New Venture Capital Fund.
4) Design your tech stack.
- What is the Best CRM and Marketing Tech Platform for a New Private Equity/Venture Capital Fund?
- How to Configure a CRM for an Investment Management Firm
- How Private Equity and Venture Capital Investors Are Eating Their Own Dog Food: Using technology as a competitive weapon.
- How Tiferes VC Uses AI to Make Better Investments
5) Market.
- An Investor’s Personal Social Media Tech Stack: In the future, everyone will be famous for 15 followers
- How Private Equity and VC Investors Are Using Social Media
6) Raise capital.
- Databases of limited partners investing in emerging VC funds
- 15 Steps to Fundraising for Your New Venture Capital or Private Equity Fund
- Fundraising Hacks for Venture Capital and Private Equity Funds
- How Influencers Can Legally Raise Capital for Funds and Companies
- 5 Innovative Fundraising Methods for Emerging Venture Capital and Private Equity Funds
- Should you give an anchor investor a stake in your fund’s management company?
- The Pros and Cons of Hiring a Placement Agent, for Small Emerging Investment Managers
- How do you attract family offices and other large investors to your direct investing platform?
- The Virtual Handshake: Opening Doors and Closing Deals Online (book)
7) Originate investments.
- Where Are the Deals?!: Best Practices of Private Equity and Venture Capital Funds in Originating Investment Opportunities
- How to identify technology trends for macro investors
- The Next Great Entrepreneurial Opportunity: How to Identify Market White Space (VIDEO)
- How to Find the Right Online Communities
- Alternative Data 101 for Students and Professors
8) Manage deal flow.
- How lead investors build out their syndicate.
9) Due diligence.
- How to Judge Investment Pitches.
10) Negotiate transaction.
- Best practices in building financial models
- Template financial model
- Valuing startup employee options
11) Monitor and report investments.
- How to run your company based on metrics: what, why, how, who, and when.
12) Accelerate portfolio company value.
I’ve posted some essays focused on the investors’ point of view:
- Launching a Portfolio Acceleration Platform at a Venture Capital or Private Equity Fund
- Beyond the Money: Best Practices of Venture Capitalists in Helping Early-Stage Companies Create Value
- It’s the People: Improving Private Equity Portfolio Company Valuations by Working with Operating Executives
- How Versatile VC collaborates with other investors
And also a lot of material from the point of view of a startup management team:
- Shaking the Money Tree: Social Media and Other Innovative Tools for Raising Capital (VIDEO)
- Recruiting Hacks: How to Woo and Win the High Performers (VIDEO)
- How to Manage Your Board Meetings
- Financial Modeling for Entrepreneurs
13) Time, market, and exit investment.
- Sales technology tools useful for B2B sales
- What should VCs do with zombie companies?
14) Grow the firm.
- How to scale a VC (or private equity) fund.
