Always Be Closing: How to Conduct an Effective Post-Mortem on Your Fundraise
So, you’ve just finished your latest fundraise. Congratulations! As we all know, fundraising can be an arduous and time-consuming process no matter how fast you closed your fund. What’s more, you can be sure that the pressure to start deploying capital will be on as soon as you’ve signed your last subscription document. At times like this, the last thing most GPs have the ability or desire to do is re-live the fundraise by conducting a “post-mortem”.
That being said, in a crowded marketplace with many GPs vying for mindshare with LPs, the months immediately following your fundraise are the best time to reflect on what worked and what didn’t work in order to refine your message and approach going forward. Draw inspiration from the oft-quoted words of Blake from Glengarry Glen Ross, “Always Be Closing” (with compliments to Alec Baldwin). Putting in a little effort to introspect as a firm after your fundraise can dramatically reduce the tax on future resources and any missteps when you next come to market.
So, what does a “post-mortem” entail? Below, I have listed my top three recommendations to address:
- It is critical to identify the inconsistencies and shortcomings in how you delivered your message. Be honest about whether the presenters tasked with telling the firm’s story were best suited for the job or whether one of them should be substituted going forward. Alternatively, consider expanding the number of partners who get front-line exposure with LPs during the fundraise. A comprehensive turn-down analysis will highlight any “decline trends” that you can fix going forward. For example, did you succeed in generating a high number of meetings only to experience a low conversion rate from on-site to closing? Were the on-site prep materials sufficient or did the broader team in the room underperform due to a lack of message discipline or other training? Could you have used your AGM more effectively in terms of developing touch points with key or new LPs?
- The intricate nature of a fundraise can sometimes stress a GP’s operational infrastructure, which is set up for sourcing and executing deals but not necessarily for an intensive, two-year raise with scrutiny from LPs on every aspect of your firm. LPs may have taken issue with deemed shortcomings in your operational approach, lack of re-ups, fund terms, volatility, liquidity/DPI or any number of factors. Try to hone in on the top 2-3 causes and work to address those matters.
- Finally, the end of your fundraise is the ideal time to cement your relationships with LPs and keep the door open for future commitments. Show LPs that you are serious about building a “long-term partnership” by taking the time to reconnect with all the LPs who committed to your fund. In some cases, take this opportunity to soothe relations with LPs that you had to cut back or refuse access. It can even be invaluable to keep in touch with LPs that passed on your fund to demonstrate that you were serious about winning them over– they will often be warmer to taking meetings when there is no immediate fundraising ask on the table and will regret not having invested when you deliver those great returns.
The end of a fundraise is an important milestone in the lifecycle of a GP. Set yourself up for continued success by properly digesting the lessons from the raise.
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Sixpoint Partners, LLC, is a registered broker/dealer, member FINRA (http://www.finra.org) and SIPC (http://www.sipc.org). Sixpoint Partners Asia Limited is licensed by the Securities and Futures Commission (http://www.sfc.hk).