Top 5 Best Fundraising Practices

1. Fundraising Fundamentals
Jennifer Jones
CEO, Jennifer Jones & Partners
Jennifer James
VP of Marketing and Investor Relations, Sofinnova

3. 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?”

4. 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

5. 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

6. 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

7. 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

8. 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?

9. 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

10. 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

11. 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

12. QUESTIONS AND ANSWERS
Jennifer Jones
CEO, Jennifer Jones & Partners
Jennifer James
VP of Marketing and Investor Relations, Sofinnova