HOW TO START A VENTURE FUND

Imagine if the knowledge and understanding of venture funds was as commonplace as, say, football, TikTok or Angry birds. Imagine if everyone in an innovation ecosystem knew the legal nuances, the technical challenges and the inner workings of a seed-stage fund.

That is the challenge we are taking on with our latest initiative within Strategy Tools, the Fund Manager Series. Over the past few months, we have had the pleasure of working closely, closely together with groups of very smart fund managers, lawyers and finance experts from the World Bank.

The result: The Fund Manager Series.

This is a dedicated series of visual tools designed for current, emerging and future fund managers.

Our vision is that this series will peel back the layers and reveal exactly how a venture fund works, what the technicalities look like, how a dealflow pipeline gets built, how the fund economics work, how to avoid the most common assumptions being made in first time funds (hint, they aim to big and are overly optimist on the ability to close on LPs).

Long-term, our vision is that the toolkit will be used in education, entreprenurship training (if you are raising venture financing for your startup, it will give you a huge informational advantage to know how the VC fund you are raising from works). We see the toolkit being used in business angel training, VC programs, corporate venture programs, national innovation agencies, ecosystem development, innovation clusters, accelerators (they really need this), national sovereign wealth funds, and of course emerging or first-time fund managers.

Over the past few months we have tested out some of the early versions with finance design sprints, emerging fund managers and entreprenurship students in Europe. The early results are stunningly clear: the tools greatly help create understanding, clarity and alignment among the participants.

Our goal, long-long-term is that the next startup wave is not about building more startups, but building more, better and smarter venture funds. (Thanks Rick Rasmussen for that idea).

In January we will also reveal the world’s first Fund Strategy Simulation, a highly interactive simulation to learn and master seed- and venture fund; fully built on the Fund Manager Series.

But first, we have some more work to do.

Stay tuned. As we complete the next versions of the world’s very first dedicated series of visual strategy tools for venture funds.

Thanks for your interest.

-?????????Chris

Huge thanks to our friends at the World Bank and beyond and our partner in this journey, Rick Rasmussen.