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The Scoop: Building Relationships with Institutional LPs

Venture capital has always thrived on relationships. To succeed, VCs must actively build and nurture connections with all types of check writers, especially institutional LPs, which can be both elusive and valuable.

Drawing from my experience allocating to venture funds and brokering allocations for major family offices and high AUM foundations, I’ve seen VCs often puzzled by institutional LPs. Frustration is common: "Why is this so hard? $1M is a rounding error for you guys!" However, the reality for institutional LPs is complex, involving regulations, politics, and misaligned incentives.

Here are my tips for building strong relationships with larger LPs:

Acknowledge Immediately

A quick response goes a long way. LPs prefer hearing "Yes, they are working on it" over "I haven't heard from them yet." Lawyers and top Rs know this, and it’s a strategy worth adopting.

Empower Your Advocate

Every deal needs an internal advocate. Provide them with the information and support they need. Remember, you’re asking them to stake their reputation on your success.

Learn the Organization

Understand the structure of the organization you’re pitching. Each has a hierarchy you must respect. Never assume; treat all team members as if your deal approval depends on them.

Overcome Negative Voices

A single negative voice can kill a deal. Bypassing junior LPs might seem efficient but can lead to resentment and sabotage. The LP world is smaller than you think, and they talk.

Understand Individual Goals

Tailor your pitch to their goals. Some investors prioritize co-investments; others focus on fund participation or specific sector expertise. Create synergy by aligning with their objectives.

Invest Early in Relationships

Connect with up-and-coming CIOs and maintain these relationships. As their careers progress, your early connections will be the foundation of your VC.

Correspond Effectively

After closing a deal, send a concise memo summarizing key points. Short, digestible updates are valuable and appreciated.

Show Empathy

A personal touch goes a long way. A note of condolence or support during difficult times shows you care about them as individuals, not just investors.

Persist

If they ghost you, it's likely a no. But a lot of times, they are on the fence or just too busy. Send a follow-up with new information, try to set up a 15-minute call, or invite them for coffee. Persistence pays off in the LP world.

Seek Advice

Starting with "advice" can lead to strong relationships. Approach from a place of curiosity and learning. As the great American philosopher Pitbull once said “Ask for money, get advice. Ask for Advice, get money twice.”

By following these tips, you can navigate the complexities of working with institutional LPs and foster strong, mutually beneficial relationships. Institutions may seem like a black box, but empathy and understanding can bridge the gap.

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DEI Fund gets Roadblocked

This week, startups based in the Bay Area have collectively secured over $230 million in funding.

This week saw a substantive difference in early stage startups getting funding than growth stage. Is this becuase of the summer season and larger growth stage companies need mroe research before getting funding?

Early Stage:

• Xcimer Energy: Raised $100 million in Series A funding for its fusion energy technology.

• Twelve Labs: An AI company specializing in video understanding, secured $50 million in Series A funding.

• Tobiko Data: Raised $21.3 million in combined seed and Series A funding for its data transformation solutions, empowering organizations to harness the power of data for insights and decision-making.

• Materna Medical: Raised $20 million in Series A funding for its women's pelvic health devices.

• Vantage Discovery: Secured $16 million in Series A funding for its e-commerce search and content discovery platform.

• Zingly.ai: Obtained $10 million in seed funding for its collaborative customer experience platform, revolutionizing how businesses interact with their customers and drive engagement.

• Inventive: Garnered $6.5 million in seed funding for its embedded AI solutions for SaaS, unlocking new possibilities for enhancing software capabilities and user experiences.

Growth Stage:

• Viaduct: Secured $10 million in Series B funding for its AI-driven predictive analytics platform, revolutionizing the prediction of product failures and enhancing operational efficiency.

The Pulse of the Valley

About LinkSV

Welcome to Link Silicon Valley (LinkSV), LLC, the ultimate platform for connecting with the people, companies, and capital that define Silicon Valley. Our meticulously curated database features over 12,000 companies, including public companies, startups, acquired or liquidated firms, and VC firms. We cover a broad spectrum of industries such as biotechnology, communications, computers, environmental, internet, medical, outsourcing, peripherals, semiconductors, semiconductor equipment, software, and storage sectors.

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LinkSV is designed to save you valuable time. Our advanced search, networking, and sales collaboration tools streamline the process of identifying and qualifying prospects. Whether you are working solo, on a team, or as part of a leads group, LinkSV enables you to apply multiple filters quickly and research individual companies from the results list. Save and share notes, flag new activity, and export detailed company information to your CRM.

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Discover how Link Silicon Valley can enhance your connections and streamline your search for the right opportunities. Visit our website, explore our services, and join our community of innovators today.

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Around The Valley

Create the Future Summit: A Gathering of Visionaries and Innovators

We had the distinct privilege of being invited to collaborate and moderate a panel at the Create the Future summit, organized by the distinguished Shawn Flynn and Michelle Yuan.

Our very own Harold Graham led the panel, comprising notable figures such as Priscilla Christie, Dave Hersh, Simon Lancaster, and Stanley Li, delved into critical topics surrounding startup fundraising, understanding investors, and the power of intuition. The discussion illuminated how adhering strictly to others' playbooks and over-relying on external advice can impact a startup's trajectory and scaling potential.

The key takeaway was clear: embrace the journey as a marathon, not a sprint. Cultivating generational relationships can provide invaluable support along the way.

The event concluded with a unique reception where art and robotics intersected. Patti Pan's exquisite art gallery challenged our emotional boundaries, reinforcing the idea that maintaining focus on the finish line from the start is essential, ensuring you have the stamina to reach it.

Upcoming Events

• Founders & Funders Jun12 Los Gatos

• LP Lakeside Jun27 Foster City

Join Us in Building Our Community

We have been overwhelmed by the positive feedback received over the past year and are committed to always elevating our events with valuable content and engaging networking opportunities. Our goal is to nurture and grow the community energy and provide an awesome experience for all attendees. Sponsors play a crucial role in making these events possible, so if you know any corporate entities seeking visibility and support opportunities, please encourage them to connect with us.

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Podcast We’re Listening To:

Silicon Valley Zombies: What does it mean to pivot & adapt?

Join us for an inspiring and transformative live talk titled "Power of the Pivot," featuring the remarkable Ken DeLeon, founder of DeLeon Realty. With a background that seamlessly blends mathematics, economics, law, and business

“You can borrow my car, you can drink my beer, but don't waste my time." 😎 
- Ken DeLeon

Note Of Gratitude

First and foremost, we want to express our sincere appreciation for your continued support and engagement over the past six months. Your feedback, both positive and constructive, has been truly invaluable in helping us shape our newsletter to provide the content you find most valuable.

Our primary goal has always been to give you an insider's perspective on what's happening beneath the surface in Silicon Valley – insights that you might not find elsewhere. While other newsletters might offer a broad overview of the market, we strive to bring you a unique and in-depth understanding of the local landscape, featuring conversations that are taking place, key players we encounter at events, and exclusive insights.

Your feedback is essential in helping us refine our content and ensure that our newsletter remains a valuable resource for you and fellow readers alike. Thank you for being an integral part of our growing community, and we look forward to embarking on this exciting journey with you!

Logan Lemery
Head of Content // Team Ignite

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