#21 VC Fundraising 101: Track Record & Data Room

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Fundraising

I’ve had a number of recent conversations about best practices in VC fundraising, track records, and data rooms. It’s been a great forcing function to revisit past experiences and talk to LPs/VCs on current best practices. There’s no one-stop-shop out there with all the answers so I’m doing my best to compile here - let’s get to it!

Fundraising: we’ve shared insights on this in previous writings. Reviewing pasts posts, some of my favorite takeaways were that it’s a numbers game, you need a playbook, and that brute force is often necessary. We shared more detail in #8 Fundraising - Show Me the Money! and #9 Opportunity Fund Insights - check them out!

Track Record

Track Record (Fred Wilson): my favorite definition is that it’s your “schedule of investments over the years with the wins, losses, and everything else. What is most interesting and valuable is the cumulative experience you can see by looking at the track record. You can see how long someone or some firm has been at it, their mistakes, their successes, how they have evolved as investors, style changes, risk appetite, and a lot more.”

In his post Sharing Your Track Record as an Emerging VC, Winter Mead writes that “track records are a key part of any LPs due diligence process; and many times they are required for LPs to invest in your VC fund. LPs care about your investment experience and crafting the right narrative is important.”

Data Room

What do you need to include in your data room? Ask 10 LPs/VCs and you’ll get 10 different answers! That’s not a huge surprise as every investor is different and has their own diligence needs and preferences. The best reference on this I’ve found was put out by Natalie Fratto at SVB where she lays out the following guidance (make sure to scroll to end of each post - she includes links to examples from the field):

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