Emerging Manager Insights Starting a Fund

Building a Comprehensive Data Room

9 Data Room Components LPs Need from Emerging Managers

When the time comes for emerging managers to raise funds, a comprehensive data room can be essential. Your data room can provide limited partners (LPs) with a one-stop shop to understand your team, your strategy, and your track record. The stronger your data room, the more likely prospective LPs may be able to entrust you with their capital.

It’s a great time to be an emerging manager. According to the Wall Street Journal, “more debut-fund managers are striking out on their own [in 2021 than ever before], emboldened by strong returns in the markets.” In Q2 2021, first-time funds made up 40% of all venture fund announcements, according to research from Different Funds cited by the Journal. At the same time, fund investors are “increasingly looking for ways to back emerging venture firms, which, research shows, tend to outperform the market and be more diverse.”

Given the increased LP appetite and the attractive potential returns associated with this growing asset class, the market continues to heat up. Nevertheless, raising a new fund remains extremely competitive. Whether you’re a seasoned VC spinning out on your own, an operator turned investor or an angel raising your first institutional fund, it’s more critical than ever to prove to LPs that your approach is differentiated. A great data room can separate you from the rest of the pack.

At SVB, we’ve worked with hundreds of the top LPs, from family offices to endowments. Recently, we asked some members of that network to share their perspectives on what they’re really looking for in a data room. We’ve also asked emerging managers who have found success for their wisdom from the trenches. Below you’ll find their insights, plus more than 10 data room templates you can download and use.

Elements to consider in your data room

Much like a founder’s investment data room, your data room may be the source of truth for prospective investors looking to understand your thesis, your track record and your fund strategy. Consider putting together the following components in a virtual data room before you begin fundraising.

Click on each topic below for best practices and component templates, including a breakdown of what each component is and why it matters to LPs:

Read the First Component

Data Room Best Practices
Overarching principles to keep in mind as you develop your data room.

Learn more

Data Room Best Practices

Component 1 of 9
Overarching principles to keep in mind as you develop your data room. Data Room Best Practices

Fundraising Pitch Deck

Component 2 of 9
One of the main qualitative documents LPs may use to vet your fund. A compelling fundraising pitch deck entices an LP to review the rest of your data room. Learn more

Investment Track Record

Component 3 of 9
A quantitative spreadsheet detailing the key financial metrics for your previous investments. Learn more

Investment Memos & Market Map

Component 4 of 9
Investment memos allow LPs to see your thought process as an investor at the time you made an investment. Market maps show overviews of the market you serve, categorized by theme or sector. Learn more

Due Diligence Questionnaire

Component 5 of 9
A living document that LPs may use to compare your fund with others and answer typical questions that arise during the due diligence process. Learn more

Limited Partnership Agreement

Component 6 of 9
A document covering legal terms that may govern your relationship with limited partners. Learn more

Fund Model

Component 7 of 9
A forward-looking financial spreadsheet that translates the investment strategy you’ve set forth in your pitch deck into a hypothetical portfolio demonstrating your fund’s performance potential. Learn more

Reference List

Component 8 of 9
A list of founders, venture capitalists and limited partners excited to share their positive experiences partnering with you. Learn more

Fund Contact List

Component 9 of 9
A comprehensive list of contacts for the partnership and the back-office support team. Learn more

Read the other articles in this Emerging Manager article series

Establishing, Navigating and Maintaining LP Relationships

Learn about the different types of LPs and determine the right mix of LPs for your firm. You’ll get tips for how to interact with prospective LPs throughout an active first fund fundraise and understand the LP’s expectations once you’ve secured funding to be ready to deploy capital.
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Pitch Your Fund by Highlighting What Makes You Noteworthy

Because the venture capital space continues to be very competitive, it’s important that first time fund managers communicate how they stand out from the rest of the crowd. Learn some best practices for making a first-time fund stand out helping to reduce the risk LPs take when investing in these new funds.

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Cash Flow Management for Emerging Managers: How to Approach Capital Calls and Distributions

Learn how fund managers should think about cash flow management, as well as strategies for balancing the needs of GPs and LPs when mapping plans for capital calls and distributions.
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