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What Are the Asset Allocators Looking For in A Start-up Fund? (Part II)

(Continued from Part I)

In this second part, I will share the notes from the several different speakers at the Pillsbury/Jefferies joint event. 

Not too surprisingly, it’s mostly through word-of-mouth and networking.  Some firms also look into industry database for big and small launches.  Some allocators take one to two years to observe, so it’s a good idea to get under the radar at an early stage and build the relationship.

No broadband reduction, but fee arrangement becomes negotiable when there’s a longer term commitment.

General partner’s interest in the fund should be material enough that there’s a personal pain when the fund is hurting. (makes sense, doesn’t it?)

Investors pay for performance, not for marketing.  The speakers didn’t show much enthusiastic towards the idea.  One of them also pointed out that only a good marketing firm can provide effective marketing service, and they’re very selective.  If you can persuade them to take you as a client, you probably can try that with the asset allocators.  Note: this does not include communication and marketing firms/coaches that don’t represent their clients to asset allocators.

(Continue to Part III)