I was disheartened to read the following in a recent trade column: “Fundraising is fast becoming a modified version of Cloak and Dagger, pitting GPs vs. LPs.” The phrase “cloak and dagger” conjures images of spies, deception and assassins. How did relationships founded in the concept of trust fall into such language of distrust?
As fundraising has become more challenging, more of our clients have elected to create or enhance their focus on improving relationships with their existing and prospective LPs. The demand for Investor Relations professionals has been growing dramatically and we have been developing these roles with many clients concerned about their short- and long-term fundraising success. Not too long ago, I attended a panel discussion on How to Improve LP/GP Relationships. At the time, I wondered how this panel discussion could possibly last longer than a couple of minutes. In my mind the answer was, “Be nice to the people who give you money” and “Be nice to the people who make you money.” It seemed like an easy open-and-shut kind of session.
To paraphrase the opening lines from the movie Casino, Robert DeNiro says; "When you trust someone, there is no other way. You give them the keys to everything that's yours, otherwise what's the point.” For me, those words sum up a lifetime of relationships for the very essence of any relationship is quite simply, trust.
Having been helpful to a number of private equity and venture capital firms in staffing their existing or newly formed Investor Relations teams, here are seven tips for how to improve those relationships.
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