New VC Fund Managers Go Abroad to Raise Funds From International LPs

  • Investors of newly formed venture-capital funds are going abroad to raise cash.
  • Their bet: Family offices and ultrarich people want exposure to US venture but don’t have access.
  • Jenny Fielding, Elizabeth Yin, and Dan Kimerling shared their fundraising strategies.

While in Italy for a wedding this summer, the venture capitalist Jenny Fielding made a detour for work. She had booked a meeting with a family office of a famous Italian shoemaker in Milan. She fretted over what to wear but decided to stick with her basics: a sundress and white Keds.

In an office building downtown, she sat around a table with a group of investors “dressed to the nines” and gave her pitch, she said. She told them that until now, she had raised capital for her firm, The Fund, almost exclusively from startup founders and builders who had socked away money or cashed out stock so they could invest on the side.

This year she set out to raise a much larger second fund, which meant she needed more and bigger checks from limited partners — the individuals, pension funds, foundations, and schools that front money to VCs. That’s how Fielding ended up in the office of Italian fashion royalty, asking them for a six-figure investment.

For a decade, mainstream limited partners put money hand over fist into funds for venture capitalists, spurred by the thought of overnight riches as tech companies minted billions on the public markets. The flow of capital motivated more investors to split from established firms and raise their own funds, but it hasn’t always been easy. The newcomers have to convince investors to write checks on the strength of their vision and a pitch deck, and limited partners, or LPs, have only so much money to go around.

Some emerging fund managers say there’s a hack. For years they’ve gone abroad to raise capital from limited partners, mostly wealthy individuals and family offices. Their bet is that international investors want exposure to the world’s largest venture ecosystem but don’t have access to top funds in the Bay Area or New York.

And after months of inflation and a tech downturn making it harder for venture capitalists to raise funds, the industry could see more emerging fund managers take their financial road shows worldwide.

“We looked abroad not because we have a global focus but out of necessity,” Fielding, a general partner at The Fund, said.

‘A more receptive audience’

Dan Kimerling, a founder and managing partner at Deciens Capital, based in Chicago, has quietly raised more than $190 million across two funds and a raft of special-purpose vehicles in just five years.

He said that when he started fundraising, he could tell in talks with potential investors that they were “overwhelmed with pitches.” In 2017, he took his financial road show to the UK and Japan.

Daniel Kimmerling, founder and managing partner at Deciens Capital, poses for a photo against a white-washed brick wall.

Daniel Kimerling, the founder and managing partner of Deciens Capital.

Deciens Capital



“You just get a more receptive audience if you’re willing to get on a plane and meet people where they are, break bread with them, and show them that they are valuable to you and your ecosystem,” Kimerling said. He now counts investors in over a dozen countries.

Kimerling acknowledged that striking up a relationship can be difficult, though he’s found that his investors overseas are more often than not eager to make introductions to other potential investors.

This isn’t new territory for international investors.

Research by Silicon Valley Bank Capital and Campden Wealth found that while family offices in North America expected to allocate 70% of their venture portfolios to investments in their home countries in 2022, family offices in the rest of the world anticipated taking a more global approach, spreading their capital in companies and funds worldwide.

Elizabeth Yin

Elizabeth Yin, a cofounder and general partner of Hustle Fund.

Hustle Fund



Elizabeth Yin, a cofounder and general partner at Hustle Fund, said she’d tapped international founders in her network to meet investors in Singapore, South Korea, Japan, Taiwan, and other countries. When the firm was seeking to raise $33 million for a second fund, a founder in Hong Kong unlocked a cache of new investors for Yin.

“All of her friends had heard of startups because of her startup, but they were in Asia where not a whole lot of people are starting funds or even starting companies,” Yin said. In China, funding for startups in the country has tumbled by 44% year over year after the Communist Party’s crackdown on tech, Bloomberg reported recently, citing research from Preqin.

“The sweet spot for emerging fund managers,” Yin said, “is you want LPs who are familiar with the asset class and are excited about investing in startups, but they also feel like they don’t have access.”

For Steve Chen, it was more of a pipeline problem. After he sold his company, YouTube, to Google in 2006, and started investing in startups, he moved his family to his home country of Taiwan in 2019. He continues to use his personal wealth to back startups and venture funds mostly stateside, including Sequoia Capital, Andreessen Horowitz, and Brianne Kimmel’s Worklife Ventures.

“I’m still personally invested in US funds, simply because there aren’t many funds that are completely based in Asia,” he said. “But the reason for that is also the investment opportunities for Asia funds are also limited.”

Barriers to entry

Historically, many emerging fund managers have preferred to raise money locally. They build relationships with family offices and wealthy individuals over months or years, while institutional investors like endowments and pension funds pile into established firms, with their billion-dollar megafunds and outsize returns.

“Going to a different country or continent and trying to build that social proof is a lot harder,” said Maren Bannon, a cofounder and general partner at January Ventures who’s based in London. The early-stage venture firm has raised two funds mostly from US LPs.

Even those with ties to international investors may struggle to raise funds as fears of a global recession escalate.

Traders work on the floor of the New York Stock Exchange in New York on November 2, 2022.

It’s looking more likely that the economy will tip into a recession next year.

Michael Nagle/Xinhua via Getty Images



What’s more, some mainstream limited partners are being forced to call off investments in venture funds as the value of their public assets tumbles — a phenomenon known as the “denominator effect.”

“If you’re an emerging manager, you’ve got two knocks against you now,” said Mark McQueen, the president and executive managing director of CIBC Innovation Banking, the growth-capital arm of one of Canada’s largest banks. A representative said the bank is also invested in several venture-capital and growth-equity funds.

To be sure, not many international investors are clamoring for access to venture funds right now, said Sunaina Sinha Haldea, the global head of private capital advisory at the investment bank Raymond James. Many of the investors who closed new funds this year did much of the fundraising in last year’s funding bonanza. And those who are raising now, more often than not, are selling themselves on deals they did at nosebleed valuations a year ago.

“Investors know the world has changed and that those marks are no longer representative,” Sinha Haldea said of international LPs, adding that they just don’t feel comfortable taking bets on emerging fund managers whose data might not reflect the state of the markets.

Jenny Fielding, general partner at the venture-capital firm The Fund, wearing leather jacket and black T-shirt in front of white brick wall.

Jenny Fielding, a cofounder and general partner of The Fund.

The Fund



But some emerging fund managers are breaking through.

Fielding had early data to show that investors were smart to trust her with their money. The Fund has backed more than 200 startups in four years, and portfolio companies like Headway, Pear, SmartHop, Contra, and Heygo, went on to raise funding at higher valuations from blue-chip investors such as Andreessen Horowitz, Lightspeed Venture Partners, NEA, and Union Square Ventures.

Even though she didn’t have a record of startup exits, Fielding’s momentum and hustle appealed to the family office in Milan.

“Our pitch to them was: ‘Hey, you can’t get into tier-one early-stage funds because no new money can get into that, especially international investors who don’t have exposure. But those funds are marking up our deals,'” Fielding said. Investing in The Fund gave them access to venture capital’s heavy hitters by proxy.

“We got the check,” she said.

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