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 The iconic VC-Backed founders are all White & Asian men. So why invest in diversity? 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 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.
- 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.
9) Due diligence.
10) Negotiate transaction.
11) Monitor and report investments.
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.
14) Grow the firm.