GP/LP Fit

The idea of product/market fit has been around for a long time. And, while founder/market fit is a newer concept, it turns out to be just as important.

Recently, Beezer Clarkson at Saphirre Ventures wrote a post titled Raising A Fund? 9 Questions That Help Get You To GP/LP Fit. If you are a GP raising a fund, you should go read this post right now. In it, Beezer goes through, in depth, the top questions she recommends you ask an LP to determine GP/LP fit.

  1. What are you currently investing in?
  2. Why venture and how long have you been investing in it?
  3. How much capital do you have under management, and how much of that is invested in venture?
  4. How many venture managers are you currently allocating to? Will you be allocating to any new managers this year?
  5. What strategies and geographies are you actively investing in?
  6. What is your preferred check size and fund size?
  7. What has been your history of supporting fund managers in follow-on funds? When you have not followed on in a fund, why not?
  8. Who is on the investment committee and what is your process for allocation approvals?
  9. Outside of great returns, what are your expectations of GPs post investment?

Seriously, go read Beezer’s post.

There’s an interesting graph in the post, which shows that a typical LP is going to add less than five new managers a year to their portfolio (and, on average, only two or three.) While an LP takes a lot of meetings, they don’t do a lot of investments.

GPs – does that sound familiar?


Also published on Medium.