When most people think of venture capitalists, they often think of investors, the people writing checks to fund startups. But that image is only one part of venture capital. In order to make those investments, venture firms must first have the money, which means they’re not only just the funders, they’re fundraisers, too.

But when you’re running a VC firm, especially as an emerging manager, how do you know which investors and limited partners (LPs) to target?

After more than 30 years of investing in both private and public companies, I’ve now started as a fund manager, and I recommend that emerging managers ask these five questions before seeking out and pitching to potential LPs.

Which LPs are you targeting?

To find the right investors, you first need to consider LPs’ investment criteria.

Institutional investors usually look for managers with a 10-year track record and at least three funds under their belt. These investors can also be hesitant to bet on emerging managers, whom they may perceive as higher risk than established investors, even though Cambridge Associates data shows emerging firms made up 72% of the top returning firms between 2004 and 2016.

Managers who are stepping out on their own after working with an existing fund, meanwhile, can target fund of funds (FOF) since the FOF will use their track record as a prior employee as a proxy for standalone experience. Emerging managers can also target niche investors: for example, if you’re investing in education, a like-minded foundation might be a potential LP, or if you’re investing in medical technologies, you might try to connect with hospitals that could benefit from those innovations.

After launching Avestria in 2019, we found that family offices and high-net-worth individuals were the best targets for us. Their investment requirements aren’t as stringent as institutional investors or FOFs’, and they’re willing to accept the risk of investing in an emerging manager in exchange for potentially high financial returns.

How well do your target LPs understand your investment thesis?

Emerging managers should find out how well their potential investors already understand the unmet need your fund is addressing.

The venture capital community has significant influence on what potential LPs see as great investment opportunities. As a result, capital can be concentrated in certain areas. For example, Juul, a male-founded e-cigarette company, received $10 billion more in funding in 2018 than female-founded companies received collectively that year. In 2020, now-defunct video platform Quibi alone raised almost 8% of the total funding that female founders got that year.

Our fund focuses on female-led life sciences and women’s health startups, and it’s sometimes hard to rope in LPs who have the most exposure to headline-making investment sectors like consumer goods or media platforms. We often have to explain the white space: Women of child-bearing age weren’t allowed to participate in clinical trials, even for products meant for women, until 1993. Even 30 years later, only 4% of all healthcare research and development is meant to address women’s health issues.