Aafreen S.’s Post

Why do private markets fundraises take so long? Ed Stubbings shares some valuable insight into why this process can take upwards of 2 years: • Starting to market before you’re ready • The portfolio was not where it needed to be, in terms of performance or distributions • Limited brain capacity from backlogged LPs • Poor timing in the fundraising calendar and getting caught in an allocation crunch • Developing FOMO among investors can take time Read the full post below, including Ed’s suggestions for addressing some of these challenges. #privateequity #investorrelations #venturecapital

An excellent short list of reasons why private markets fundraises can take *so dang long.* Some issues lie with the GP, and some are about LP workload and allocations. It's almost never just one factor, so best to try to get as many of your ducks in a row 🦆🦆🦆 as possible before launching, to maximize your chances of success. Thanks Ed Stubbings for sharing.

A highly insightful article in the The Wall Street Journal and I recommend all the LPs I have met around the globe seeking middle market private equity to read this article & track this manager as the US remains the ideal market for this strategy in spite of the proliferation & clouding of fund managers & capital over the past decade. I have heard this was one of the fastest first-time private markets fundraises in recent memory & it is no secret that limited partners around the globe are prioritizing the lower-middle market of private equity in the United States. Missouri-based Agellus Capital raises its initial fund $400 million (above $350 million target) to back smaller companies providing essential services. With a large institutional anchor & less than 10 LPs, the former executives from middle market PE firms St. Louis-based Thompson Street Capital Partners & Boston-based Audax Private Equity have previously closed nearly 100 transactions & seek businesses of $2 to $20 million of EBITDA, aiming to triple size during investment period via organic and M&A growth, essentially building upon a playbook and track record under established managers. This is the proper, well-founded emerging manager strategy we seek, and the opposite of the mass "overnight fund manager" ill-fated phenomena of the past decade. Congratulations to Agellus Capital and their capital advisor Aviditi Advisors! #alternativeassets #privatemarkets #privateequity #middlemarket #limitedpartners #capitalmarkets #fundmanagers #fundraising #emergingmanagers

🚀 Exciting News in the World of Private Equity! 🚀 Based on this article, it looks like the optimism for turning the faucet back on for #privateequity fundraising is revived, and lower middle market seems to be what is taking center stage in 2024. (Woohoo for the majority of our clientel!) Here's my recap if you don't want to dig through the article! ✨ Key Insights: *Smaller operators motivated to sell are driving M&A volume in the lower middle-market. (So if you are lower middle-market and looking for a nice liquidity event, this may be your year!) *Larger funds are winning over LPs with brand names and diversified strategies. 📉 Recap of Last Year: *PE fundraising numbers suffered due to high interest rates and geopolitical headwinds. 🔍 Looking Ahead: *Placement agents and advisors anticipate a better year for private equity fundraising as M&A activity recovers, to an extent. 💰 Lower Middle-Market Trends: *Despite "market calamity," lower middle-market firms are still seeing deals and exits as founders of smaller companies are motivated to sell. 💼 Winning Strategies: *Private equity managers operating multibillion-dollar funds are winning mandates with international investors, emphasizing the safety of brand names and well-diversified strategies. The article is cautiously encouraging. :) Who else is excited to see what 2024 holds for the private equity landscape?! #privateequity #MergersAndAcquisitions #MandA #AcquisitionStrategy #DealMaking

Raising capital? Get ready to meet these 5 LP types! (It’s not what you expect - and you definitely want to find #5!) This isn’t a standard lecture on institutional Vs private or early-stage Vs late-stage investors. These are the actual LP personalities you’ll meet if you are raising capital. 1. 𝗧𝗵𝗲 𝗙𝗮𝘀𝘁 𝗡𝗼'𝘀 ❌ ↳ These LPs shut the door faster than the speed of light. No hesitation and no sugar coating! 2. 𝗧𝗵𝗲 𝗦𝗶𝗹𝗲𝗻𝘁 𝗠𝗮𝗷𝗼𝗿𝗶𝘁𝘆 🤐 ↳ It’s like they’ve taken a vow of silence. No matter how many emails you send, you’ll hear crickets. 3. 𝗧𝗵𝗲 𝗚𝗵𝗼𝘀𝘁𝗲𝗿𝘀 👻 ↳ They express interest, take meetings, and then 𝘱𝘰𝘰𝘧 - they vanish without a trace. 4. 𝗧𝗵𝗲 𝗧𝗶𝗿𝗲 𝗞𝗶𝗰𝗸𝗲𝗿𝘀 🤡 ↳ They’re curious but not committed. They are just taking (𝘸𝘢𝘴𝘵𝘪𝘯𝘨) your time for a free joyride. 5. 𝗧𝗵𝗲 𝗧𝗿𝘂𝗲 𝗕𝗲𝗹𝗶𝗲𝘃𝗲𝗿𝘀 😍 ↳ The select few who believe in your vision and are ready to back you up. So when you feel like you’ve run out of options, remember: Your true investors are still out there.  They just haven’t heard your story yet, but they will. Keep going. Which LP type do you think is the most challenging to deal with? I’m Diana Tenkova - Capital-raising strategies for Next-Gen managers. Capital-Raising Made Simpler, Smoother & More Effective - The Institutional Quality Way. #EmergingManagers #Fundraising #LPs #CapitalRaising #Capitalraising

Can't raise investment at your last round valuation? Need to do a down round? Down rounds come in three flavours: 1. a bit lower valuation than your last round, more like not-an-up-round. 2. a significantly lower valuation 3. a massive discount, wiping out existing shareholders In this video with SeedLegals and planD, we explain the strategy for down rounds, how to sell it to your investors, and what it means for you. https://lnkd.in/ebK48yYv

Random Thought - I told a founder today to ask a potential VC investor in their pre-seed to get the overview deck / memo they raised their fund with / have recently sent to the LPs (their customer/clients) - or at least understand where they are in their fund deployment, talk to the other port cos, ask to talk to one of their LPs, and gain a better understanding of what they have told / suggested to their LPs what success looks like for them. Most founders never know what business their investors are in…. I didnt ….. What they are truly “promising” to their customers etc. I had no clue what equity in my company meant in the larger “game”. The first institutions on your cap-table are of the MOST importance! You are allowed to ask. They are allowed to say no. Create a relationship built on mutual goals …. Should you Set OKRs with your investors and the board……. Why not??!??

The journey: Victor Capital Partners, which launched as an independent sponsors in 2016 by ex-Irving Place Capital partner Douglas Korn, closed its first institutional #privateequity fund on $310m, beatings its original target. Victor is kicking in a 10% GP commit and is seeking around 7 or 8 platforms for the first fund. The firm also is offering LPs co-investment. “That allows us in many ways to compete as if we’re a $310m fund or compete as if we’re a $500m fund,” Korn said. Victor Capital is among a handful of emerging managers successfully attracting capital from LPs in the still-challenging fundraising environment. Read more here on Buyouts (and check out our extensive database of emerging manager funds in market linked in the story): https://lnkd.in/eFSNuJix

Another emerging manager breaks through and switches from the independent sponsor model to funds - a positive sign for the broader market. I expect to see a number of independent sponsors emerge in the coming years, as a way of starting founders’ journeys, particularly in Europe where the direct deal model means deal by deal carry rather than whole-fund carry.

If you're a VC struggling to hit your first or second close, you’re likely making these mistakes—and you might not like hearing them... 👉 1️⃣ You’re not truly differentiated. Most funds pitch the same thing: “Great network, proprietary deal flow, early wins.” LPs hear this all the time. What they actually want is a clear reason why YOUR fund stands out—𝐚𝐧𝐝 𝐡𝐨𝐰 𝐢𝐭 𝐝𝐫𝐢𝐯𝐞𝐬 𝐑𝐎𝐈 𝐚𝐧𝐝 𝐥𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐛𝐞𝐭𝐭𝐞𝐫 𝐭𝐡𝐚𝐧 𝐚𝐧𝐲𝐨𝐧𝐞 𝐞𝐥𝐬𝐞. 2️⃣ You’re not answering the right question. LPs don’t care about themes or buzzwords. They’re asking: 𝐖𝐡𝐲 𝐛𝐞𝐭 𝐨𝐧 𝐲𝐨𝐮 𝐯𝐞𝐫𝐬𝐮𝐬 𝐭𝐡𝐞 𝐝𝐨𝐳𝐞𝐧𝐬 𝐨𝐟 𝐨𝐭𝐡𝐞𝐫 𝐟𝐮𝐧𝐝𝐬 𝐡𝐢𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐞𝐢𝐫 𝐢𝐧𝐛𝐨𝐱? Make it easy for them to see why your strategy 𝐝𝐞𝐥𝐢𝐯𝐞𝐫𝐬 𝐫𝐞𝐭𝐮𝐫𝐧𝐬. 3️⃣ You lack urgency. Fundraising isn't about randomly reaching out and hoping things stick. It’s about a coordinated playbook that engages the 𝐑𝐈𝐆𝐇𝐓 𝐋𝐏𝐬 at the 𝐑𝐈𝐆𝐇𝐓 𝐭𝐢𝐦𝐞—with the 𝐑𝐈𝐆𝐇𝐓 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥𝐬. I've helped fund managers with strategies that lead to faster closes by rethinking their approach entirely. If you’re gearing up for your next close or feel stuck, DM me—I can help you avoid these pitfalls and 𝐬𝐡𝐨𝐰 𝐲𝐨𝐮 𝐞𝐱𝐚𝐜𝐭𝐥𝐲 𝐰𝐡𝐚𝐭 𝐋𝐏𝐬 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐭𝐥𝐲 𝐢𝐧𝐯𝐞𝐬𝐭 𝐢𝐧 𝐲𝐨𝐮𝐫 𝐟𝐮𝐧𝐝. #VC #EmergingManagers #FundraisingStrategy #LP