The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Mark Suster on The Biggest Fundraising Lessons for VCs, Why the Correction in Venture is Still to Come, Why Private Equity Will Replace IPOs and M&A as the Exit Path & The Woke Left and a Trump Administration; What Happens?
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May 1, 2024 Mark Suster, a General Partner at Upfront Ventures and a seasoned entrepreneur, shares key insights from his journey in venture capital. He discusses crucial fundraising lessons, emphasizing institutional relationships and the common pitfalls faced by emerging managers. Suster predicts a shift as private equity takes a more prominent exit role, questioning the future of IPOs and M&A. He also reflects on the emotional resilience required in both startups and investing and highlights the importance of evaluating deals thoughtfully amidst current market volatility.
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Morgan Stanley Investment
- Mark Suster persisted through seven meetings with Jamie Sparron at Morgan Stanley before securing a $22.5M commitment.
- This commitment was crucial for closing his $195M fund, proving the importance of persistence in fundraising.
Minimum Close Strategy
- When fundraising, aim for the smallest close possible to get started, even if it's below the target.
- Build a strong narrative around the close and leverage it to secure further commitments, ensuring business continuity.
Fundraising Messaging
- Set a smaller fundraising target on your pitch deck than your actual goal to avoid the appearance of failure.
- Offer incentives like discounts or extra carry to early investors who commit before larger institutions.