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Fundraising Fundamentals: NCVA presentation April 2012

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Fundraising Fundamentals: NCVA presentation April 2012

  1. 1. Fundraising Fundamentals Jennifer Jones CEO, Jennifer Jones & Partners Jennifer James VP of Marketing and Investor Relations, Sofinnova
  2. 2. LPs’ Thoughts: “Existing investors must come back and “Make sure you have “Don’t bother to fundraise take 50% of the fund. conversations with all unless you have had some It shows your LPs before you go exits in your last fund-that commitment.” out. Know where they means at least one and stand as it relates to hopefully two that provide commiting to you.” at least a 2x.” “I’m not sure I even “Many funds are not LIKE venture capital as even interested at all in an asset class today. I life sciences. It’s just can make a lot better taking too long to get returns elsewhere. results.” Venture just doesn’t have the returns.” “Your fund returns are very good! Why don't I ever hear or read about you?”
  3. 3. Funds on the Road over Time: 1/2008-1/2012 JAN-08 JAN-09 JAN-10 JAN-11 APR-11 JUL-11 OCT-11 JAN-12 Source: www.preqin.com
  4. 4. Breakdown of Funds in Market by Fund Type Real Estate Venture Buyout Growth Fund of Infrastructure Distressed Mezzanine Natural Secondaries Other Capital Funds PE Resources Source: www.preqin.com
  5. 5. Average Time Spent Marketing Funds 2004 to 2011 Months 2004 2005 2006 2007 2008 2009 2010 2011 Source: www.preqin.com Year of Final Close
  6. 6. Top 5 Best Fundraising Practices Best Develop and communicate a compelling pitch for LPs  Recognize the importance of standing out among similarly situated funds Practice  Weak 10 year VC performance numbers are making limited partners cautious  Getting your pitch right is vital – make it tangible  LPs are short on time—if it isn’t compelling, they are moving on Take action: Get it right in 15 Slides  Demonstrate your differentiation and an “edge” – with both words and numbers  You must clearly explain what you do, how you do it, how it produces results — and how it is repeatable in today’s markets  Bring your passion to the page – and find a way to connect
  7. 7. Top 5 Best Fundraising Practices Best Recognize that the golden days of “Venture Allocation” are long past Practice  Most LPs have built out their portfolios—very few are trying to fill a “venture bucket”  Investors are absolute and opportunistic—you will be measured against all other options  LPs are not your LPs for life anymore—they are digging in and making hard choices Take action  Help your team show performance in its best light  People are looking for diversifiers and things that are additive to what they already hold  Define. Define. Define. Be specific about where you play and what your typical deal looks like  Get beyond VC performance—how do you stack up against the public markets?
  8. 8. Top 5 Best Fundraising Practices Best Get your back office ready – it’s going to be a bumpy ride Practice  Investors have a lot of choices – don’t make diligence more work than it has to be  Take a hard look at your team’s strengths and weaknesses – and address them  Don’t assume you know what LPs want to cover – ask them  Being ready for anything is a competitive advantage Take action  Make a check list  You already know 80% of what you will be asked - get it ready  Build a rock solid data room – in IntraLinks or another trusted web product  Create a “slide library”  Prepare specific agendas in advance of meetings  Commit to quick turnaround times for LP requests and stay out in front
  9. 9. Top 5 Best Fundraising Practices Best Get your timing right  LPs need more notice than ever about your raise Practice  Existing support is key to bringing in the new money  Momentum must be built throughout—air traffic control  The all important form D  Manage the media Take action  Get into the weeds to know how and when you will cross the finish line  Have we talked to existing LPs? What timeline can they agree to?  When will we launch? Close?  What will be on the cover?  Form D strategy? Press strategy?  Create an overall timeline to manage against
  10. 10. Top 5 Best Fundraising Practices Best Be Consistent and Transparent Throughout Your Process Practice  Are LPs hearing the same information and data from your team?  Will your data hold up to detailed scrutiny?  Is your story consistent with what LPs will hear out in the VC echo chamber? Take Action  Create planning docs that will keep your team on the same page  Keep in contact with CEOs, existing LPs, and co-investing GPs to ensure a consistent message  Know your weak spots and tough stories. Be prepared to address them in a straight forward, honest (and quick!) manner.  Meet weekly, every week, until the last LPA docs are signed
  11. 11. QUESTIONS AND ANSWERS Jennifer Jones CEO, Jennifer Jones & Partners Jennifer James VP of Marketing and Investor Relations, Sofinnova

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