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The Good, the Bad, the Ugly of a GP Data Room

What separates a first-time fund manager who closes institutional capital from one who never gets a second meeting? Often, it’s not the strategy. It’s the data room.

Most emerging managers obsess over their pitch. The deck. The narrative. The 45-minute meeting. And then they win the meeting — and lose the process. Because when the serious LP sends over their due diligence checklist, what comes back is a Dropbox folder with four PDFs, two of which are the wrong version, one that’s password protected and one that has not been updated for 15 months.

This is not hypothetical. It happens every week.

The GP data room is your operational credibility made visible. It tells an LP three things before they’ve read a single page: whether you’re organized, whether you’re serious, and whether you’ve done this before. For first-time fund managers — where institutional trust doesn’t yet exist — the data room may be the single most consequential structure you’ll ever build.

We’ve mapped the full architecture of a professional GP data room in the GP Data Room Canvas, covering 15 categories from Introduction to Future Funds. In this article, we walk through four real-world cases — the bad, the weak, the good, and the outstanding — to show exactly what passes institutional scrutiny and what doesn’t.

Why the Data Room Is a First-Time Fund Manager’s Credibility Infrastructure

When an established manager like a Sequoia or Benchmark raises a new fund, they don’t need a data room to establish trust. The brand does it. The track record does it. The relationships do it.

You don’t have that.

What you have is process. And the data room is the physical manifestation of your process. When an LP — a family office, a fund of funds, an institutional allocator — opens your data room, they are asking: Can this team execute? Are they organized? Do they think ahead? Can I trust them with $10 million of our capital over 12 years?

A bad data room doesn’t just slow down due diligence. It ends conversations.

Let’s look at the four cases.

Case 1: The Ugly — “Venture Capital Partners Fund I” (VCP)

A two-person team, former consultants, first-time fund, targeting €30M. Strong network. Compelling thesis. Disastrous data room.

VCP had been fundraising for 14 months. They had great coffee meetings. They got into diligence with seven LPs. They closed zero.

When we reviewed their data room, here is what we found — or rather, what we didn’t find.

Section 1 — Introduction: A single two-page PDF labeled “About Us.” No fact sheet. No term sheet. No ESG policy. No market analysis. The intro to the fund was three bullet points inside their pitch deck.

Section 2 — Fund Deck: A 22-slide deck, version 7, filename “FinalFINAL_v7_USE THIS ONE.pptx.” No LPA. No subscription forms. No fund timeline. When asked for the LPA, the team said, “We’re still working with our lawyer on that.”

Sections 3 & 5 — Legal and Financial: Empty. No articles of association for the GP entity. No cap table. No fund model. No budget. The team had a verbal financial model they could walk through on a call, but nothing documented.

Section 6 — Team: Two CVs in PDF format. No references. No track record documentation.

Section 9 — Portfolio: A list of eight companies they had “advised or angel invested in” informally, with no documentation of ownership, no investment memos, no IC process described.

The result: Every LP who opened this data room and got past the first folder understood immediately: this team is not ready. Not because their thesis was wrong. Not because the people were bad. But because they had no operational infrastructure. They couldn’t tell the story of how a decision gets made, how money moves, how LPs would be protected, or how the fund actually works.

The specific failures:

  • No LPA at 14 months into fundraising
  • No fund model or financial projections
  • No formal track record documentation (item 6.9)
  • No investment process documentation (7.3)
  • No IC setup described (7.5)
  • No GP legal structure (3.8, 3.9)
  • No service provider list (13.1)

The lesson: A data room with missing legal and financial foundations doesn’t signal “early stage.” It signals “not serious.” An LP cannot write a check to a fund that cannot explain its own legal structure.

Case 2: The Bad — “Nordic Deep Tech I” (NDT)

Three partners, one with prior VC experience, targeting €50M, deep tech focus. Professionally run. Data room built in a rush.

NDT had raised €15M from friends and family. They were now pitching institutional LPs — fund of funds, development finance institutions, one family office. They had a data room. It was just… wrong in the ways that matter most to institutions.

Section 1 — Introduction: Solid intro to the team. Clean fact sheet. No ESG policy. When pushed on it, the team said, “ESG is embedded in our thesis.” This is the wrong answer. Every institutional LP has an ESG checklist. A verbal commitment is not documentation.

Section 2 — Fund Deck: Good short deck. No long deck. No LPA — they had a term sheet for the fund, but the actual LP Agreement was “being finalized.”

Section 3 — Legal: Articles of association existed. No capitalization table for the GP entity. This matters because institutional LPs want to understand carried interest economics and GP incentive alignment before they commit. Who owns what? What happens if a partner leaves?

Section 5 — Financial: Fund model existed — a good one, actually. But the liquidity budget (5.3) was missing, and the annual accounting (5.4) showed only Year 1. LPs running 10-year models need to see the full 15-year fund lifecycle, at minimum in projection form.

Section 7 — Investment Strategy: Investment strategy was well documented. But there were no example memos or materials (7.4). For first-time managers, this is critical. LPs can’t assess your judgment based on a strategy document alone. They need to see a real or illustrative investment memo — how you think, how you structure an argument, what diligence looks like in practice.

Section 8 — Deal Flow: NDT had impressive deal flow — 200+ companies reviewed in 18 months. But it was not documented. No pipeline list. No sourcing breakdown. Just a verbal claim on a slide. An institutional LP will ask: how do you know you’re seeing the best deals? Where does your deal flow come from? If the answer is “we’re well connected,” that doesn’t survive diligence.

Section 12 — Fund Performance: Listed DPI of 0, TVPI of 1.1x on their informal angel portfolio. But the methodology wasn’t explained, the valuations weren’t audited, and the comparison wasn’t made to a benchmark. Presenting unaudited performance numbers without context is worse than presenting no numbers — it raises questions.

The result: NDT got to final stages with three LPs and closed none on the institutional side. They eventually closed the fund off high-net-worth individuals, at a smaller size than targeted. Two of the three institutional LPs gave the same feedback: “Not ready for institutional capital. Come back with Fund II.”

The specific failures:

  • No ESG policy document (1.4, 7.7)
  • LPA not available during diligence (2.4)
  • No GP cap table (3.5)
  • No GP carried interest structure documented (3.8)
  • No example IC memos (7.4)
  • No documented deal flow pipeline (8.2)
  • Unaudited, uncontextualized performance data (12.1)

The lesson: A data room that has most of the pieces but is missing the institutional-grade items — LPA, ESG, memos, documented deal flow — will fail with institutional LPs even if the team and thesis are strong. Institutional allocators are not trying to be difficult. They have compliance obligations, investment committee requirements, and fiduciary duties. They cannot make exceptions.

Case 3: The Good — “Meridian Ventures Fund I” (MVF)

Solo GP with a strong operator background, targeting $40M, B2B SaaS focus, US market.

Meridian had one thing working against them: a solo GP setup, which many institutional LPs won’t back. But their data room was so comprehensively built that it answered every objection before it was asked.

Section 1 — Introduction: A three-page fund introduction that included current fundraising status (amounts committed, amounts soft-circled), a clean two-page fact sheet, a one-page ESG integration policy, a market analysis benchmarking the fund against 12 comparable B2B SaaS early-stage funds, and a clear articulation of LP benefits — co-investment rights, quarterly reporting, annual LP meeting.

Section 2 — Fund Deck: Executive summary (two pages), a 15-slide short deck, a 40-slide long deck, a fully negotiated LPA reviewed by a top-tier fund counsel, subscription forms ready to execute, a 15-year fund timeline with capital deployment milestones, and a clear narrative of the path to Fund II.

Section 3 — Legal: Complete. Articles of association for the GP entity, voting arrangements, shareholder agreement for the management company, investor rights agreements, clean cap table (the GP was co-owned 70/30 by the solo GP and a venture partner), stock option plan for future team hires, and full GP structure documentation including carried interest mechanics.

Section 5 — Financial: A bottom-up fund model with scenario analysis (base, bull, bear), a full 15-year budget with management fee projections, a full 15-year liquidity budget, and summary financial projections in one-page form.

Section 6 — Team: Comprehensive. Full CVs, references (three per team member), and — critically — a documented track record section that included every angel investment the GP had made, with ownership percentages, invested amounts, current valuations, and methodology.

Section 7 — Investment Strategy: Full investment strategy document, a separate investment process flowchart showing stages from sourcing to IC to term sheet to close, three example investment memos from actual investments (redacted), IC structure, a fund-level sample term sheet, and a standalone ESG document.

Section 8 — Deal Flow: A pipeline dashboard showing 340 companies reviewed over 24 months, broken down by source (network introductions 45%, inbound 30%, proactive outreach 25%), stage, and sector. A documented list of 20 top-priority pipeline companies with status.

Section 9 — Portfolio: Five investments documented with full IC memos, “why we invested” write-ups, portfolio construction logic, and a portfolio model showing expected follow-on reserves, ownership targets, and exit scenarios, broken down per company, per year. Importantly, there was a clear logic linking the investment strategy, term sheet and portfolio construction.

The result: Meridian closed their $40M fund in nine months, with three institutional LPs including a fund of funds. The solo GP structure was challenged, but the depth of documentation — especially the track record documentation, the example memos, and the clear GP legal structure — converted skeptics into LPs.

What made it work:

  • Complete legal documentation from day one
  • Track record presented with methodology and transparency
  • Example investment memos showing actual decision quality
  • Deal flow data quantified and sourced
  • LP benefits articulated clearly (10.3)
  • Path to Fund II described concretely (15.1)
Team Ember Capital with their GP Coach

Case 4: The Outstanding — “Ember Capital Fund I” (ECF)

Two GPs, one former operator (Series B exit), one former institutional VC (eight years at a top-tier fund), targeting CAD$75M, climate tech.

Ember built their data room the way great operators build products: with the user — the LP — at the center. Before they launched their data room, they interviewed 55 institutional LPs and eight fund of funds to understand exactly what was missing in the emerging manager data rooms they reviewed most often.

Then they built to that spec.

Sections 1-2 — Introduction and Fund Deck: Standard excellent execution. But they added one thing nobody else does: a live fund dashboard accessible through the data room, showing real-time fundraising status, committed capital, and timeline. LPs who had soft-circled could log in and see the momentum. This is psychological — it creates conviction and urgency simultaneously.

Section 3 — Legal: Not just complete, but annotated. The LPA came with a two-page plain-English summary of key terms — management fee, carried interest, clawback provisions, LP removal rights, key person clause. Most LPs are not fund lawyers. The team who explains their own legal documents is the team that earns trust.

Section 5 — Financial: The fund model was scenario-based and interactive (an Excel model, not a locked PDF). LPs could adjust deployment pace, loss ratio, and exit multiple assumptions and see outputs in real time. Footnotes explained every assumption. This is remarkable for a first-time fund.

Section 6 — Team: Beyond CVs and references, Ember included a “team working agreement” — how decisions get made between the two GPs, what happens in disagreement, the succession plan if a GP leaves. This document doesn’t exist in 99% of first-time fund data rooms. It answers the most common unasked question in every LP’s mind: What happens if these two people have a falling out?

Section 7 — Investment Strategy: Five full investment memos from actual investments. A documented IC process that included a devil’s advocate requirement — one partner formally argues against every investment before a decision is made. An ESG strategy that wasn’t a policy statement but a 12-page integration document showing how climate impact was scored alongside financial returns.

Section 8 — Deal Flow: A deal flow database showing 18 months of activity, 420 companies reviewed, sourcing channels, conversion rates at each stage, and a network map of their top 30 deal flow partners. They had exclusivity or right-of-first-refusal agreements with three university deeptech transfer programs documented in the data room.

Section 10 — Limited Partners: LP overview with anonymized profiles of all committed LPs showing type, geography, and ticket size. Capital call mechanics explained with sample notices. A full articulation of LP benefits including co-investment policy, information rights, and annual meeting format. Clear articulation of LP value proposition for different categories of LPs.

Section 11 — Value Creation and Exit Strategy: A 10-page value creation playbook describing exactly how Ember works with portfolio companies post-investment, with documented frameworks and case studies from the partners’ prior experience. Exit strategy documented by sector, showing comparable transactions and target ownership thresholds.

Section 12 — Performance: Full documentation of both partners’ prior investing track records, with verification methodology, auditor letter, benchmark comparison (Cambridge Associates vintage year), and attribution analysis showing individual partner contribution.

Section 14 — DDFAQ: 104 FAQs with thorough answers. Built from actual LP questions received over 18 months. This alone saved dozens of hours of back-and-forth email chains with LPs in diligence.

The result: Ember oversubscribed their CAD$75M fund at CAD$88M in seven months. They received interest from LPs they had never contacted — word spread through the LP community that the data room was the best they had seen from a first-time manager. One fund of funds LP told them directly: “We’ve backed 40 emerging managers. Your data room was in the top three we’ve ever seen. That told us everything we needed to know about how you’ll run the fund.”

The Pattern: What Actually Passes Institutional Scrutiny

Looking across these four cases, the gap between good and bad is not talent. It’s preparation and intentionality. Here’s what consistently separates emerging managers who close institutional capital from those who don’t.

The six non-negotiables for institutional diligence:

1. A finalized LPA, available from day one. Not “being drafted.” Not “almost ready.” LPs cannot commit to a fund without reviewing the LP Agreement. If your LPA isn’t ready, you’re not ready to run a diligence process. Sure,  you can wait for an anchor to set the terms for you, but is that really what you want…?

2. A documented track record with methodology. Every angel investment. Every board seat. Every advisory role where you had information rights. Presented with invested capital, current value, methodology for valuation, and attribution. An unaudited claim is not a track record. A documented, explained, attributed record is.

3. At least two real investment memos. Strategy documents show intent. Investment memos show judgment. LPs back people, and people are revealed in the way they make decisions. An IC memo — even redacted — is one of the most powerful documents in your data room.

4. A documented investment process. From sourcing to IC to term sheet to close. Who votes. What constitutes a veto. How long it takes. What the post-investment monitoring looks like. Process is proof of professionalism.

5. Clear logic from investment strategy to term sheet and portfolio construction If the deck says “can invest opportunistically at pre-seed” or “will follow-on with the winners”, make sure this is actually reflected in the portfolio construction tab in the fund model. If, “will exit selected deals at series A” is a pillar of your liquidity strategy, make sure you have this right embedded in your term sheet.

6. A complete GP legal structure. Who owns the management company. How carried interest is split. What happens if a GP exits. Key person clause triggers. LP removal rights. These are not details — they are the foundation of the trust relationship between you and your LPs.

Building Your Data Room: A Practical Approach

The GP Data Room Canvas organizes this work across 15 sections, from Introduction through Future Funds. For first-time managers, we recommend building in three phases:

Phase 1 — Foundation (before first LP meeting): Sections 1, 2, 3, 5, and 6. Introduction, Fund Deck, Legal, Financial, and Team. These are the table stakes. If these are incomplete, you have no business having an institutional LP conversation.

Phase 2 — Differentiation (before diligence kicks off): Sections 7, 8, 9, and 12. Investment Strategy including example memos, Deal Flow documentation, Portfolio overview if you have investments, and any Performance documentation. This is where you separate yourself from the crowd.

Phase 3 — Excellence (ongoing, refined through diligence): Sections 10, 11, 13, 14, and 15. LP documentation, Value Creation strategy, Service Providers, FAQ, and Future Fund path. Build the FAQ in real time as LPs ask questions. Update the service provider list as you appoint advisors. These sections are the mark of a manager who is building for the long term.

GP Data Room Canvas, get it at www.strategytools.io

The Real Benchmark

The question is not: Does my data room have everything?

The question is: Does my data room answer every question an institutional LP will have before they ask it?

The best emerging managers treat the data room not as a checklist to complete, but as a product to design. They think about the LP experience. They think about the LPs journey through the data room. They think about the questions behind the questions. They think about what they would want to see if they were on the other side of the table.

Ember Capital built a data room that circulated through the LP community organically. Nordic Deep Tech spent 18 months fundraising and came away with nothing from institutional LPs.

Same market. Same asset class. Same fund size target.

The data room is never just a folder of documents. It is the first proof point of how you will run your fund.

Build it accordingly.

The GP Data Room Canvas is a free tool from Strategy Tools, designed to help emerging managers build institutional-grade fundraising infrastructure. Download it at strategytools.io.

Want to assess your own data room? Use the Canvas as a checklist: 15 sections, 60+ line items. Any section that is incomplete or undocumented is a potential reason an LP doesn’t write you a check.

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Ready to raise capital? Here’s your materials checklist

Startup founder, looking to raise investor capital? Working on your pitch deck? Building out your data room? Currently in one of our Investor Readiness programs? This one is for you.

In recent weeks, we have worked with 400+ founders from pre-seed to Series B. A question that everyone asks; “What do we need for fundraising materials?”. Our answer: it depends, but probably more than you think. In this article we explore the current market expectations for founders going to market to raise capital.

Before we start….

Not every startup founder should raise outside investor capital. In fact, most probably should not. Bootstrapping, growing through revenue, is a perfectly good strategy. In fact, this can lead to a far better outcome for many founders than taking on outside investors, with dilutive financing and liquidation preferences stacked on each other and more.

Today, using a wide range of AI tools, we see more and more founder hit breakout revenue just bootstrapped, but for many founders, outside financing is still needed.

An exception to every rule

While most founders need to spend significant amounts of time on fundraising materials, fact is that some can skip it entirely. If you have an extreme outlier team, ARR velocity or any other factor that puts you in that top 1% – 2% bracket; most likely, investors will come to you, throwing term sheets at you faster than you can reject them. For these, exceptionally few, founders, fact is, you don’t have to make, build or prepare anything. Other, of course, than hitting $100M ARR in your first 18 months, and having a team of five people that just left Anthropic.

For the rest of us, here’s the checklist.

Choose your level, choose your materials

We identify eight levels of ‘startup founder maturity’. For some founders, thanks to unique team and breakout traction, level 1 might be sufficient, but in our experience, it pays off to work through all levels, with a goal to complete level 8, our most advanced maturity level, with all six decks, all materials and a full data room to boost.

Which level you choose to go for, is, of course, entirely up to you.

1.      Strategic Memo

Want to do this quick and different? Got the confidence  to fundraise ‘differently’? Follow Mistral’s Strategic Memo. When French AI startup Mistral raised a solid €105m pre-seed round with no product, four weeks after launching and just days after hiring its first employees, the startup world took attention.

For some founders, maybe a Strategic Memo is the right way to go?

Mistral’s 7-page Strategic Memo and the €105M round that followed.

2.      Pitch deck

For most founders,  including 1000’s of accelerators, incubators and startup hubs, ‘The Pitch deck’ is a must for anyone looking to raise capital.

But, did you know, there are actually six different investor decks you would want to develop?

We describe these six in more details in our “Founder? These are the six decks you need” if you are aiming for level two, you should pull together a 10-12 slide deck (what we call Short deck A: Your pitch deck), sufficient for pitch events with you on stage and early meetings; just don’t expect this to take you to anything resembling a successful funding round.

Six different decks you should build out.

3.      Two decks, financial model

Slightly more advanced, you now develop both Short deck A: Your pitch deck and Introduction deck: Investment teaser.

But more than that, you also take the time to develop a robust financial model. This is a model showcasing your business model and your growth trajectories. Maybe also a base, bull and bear case scenario.

Now, investors will have a chance to dig into and test your assumptions, your CAC, your LTV, your margins, churn rates and all key factors in your business model.

Pro tip: if you are aiming to share your financial model, you might want to consider shooting a short Loom video where you walk through it, you know, just to make life a little bit easier for the junior analyst trying to understand your spreadsheet logic.

Everyone loves a good financial model. Just don’t expect everyone to understand yours…

4.      Three decks, financial model, Investor FAQ

OK, so you got the three most important decks (Pitch deck, Investment Teaser and Executive Summary) you got a good financial model, now you expand into the world of Investor FAQs.

Effectively, these are the top 25 – 50+ questions you believe investors would want to ask you in meetings and during the DD process. This allows you to pre-empt the tough questions and also show you truly understand what your investors are looking for.

If you are not sure where to start, hit up Claude, upload your Investment Teaser and ask Claude to help you develop the Investor FAQ. Chances are, you’ll be both impressed and surprised.

5.      Four decks, financial model, Investor FAQ, Investment instrument

Shifting into the more mature-levels, you now got your four most important decks (Pitch deck, Investment Teaser and Executive Summary and Short Deck B, First Meeting deck). You got the financial model, the FAQ.

Next, the investment instrument. Not all founders would want this. Some are looking for a lead investor to set the terms, choose the instrument and structure the round. But for many founders, especially those with some negotiation power, it is perfectly welcome for you to set the terms and choose the investment instrument. Usually easier in the earlier stages, most founders would opt for a capped SAFE note, a standard convertible loan agreement or maybe a standard debt structure.

As long as you are using “industry standard”, most early-stage investors are ok with it. Worst case, if you meet a strong lead investor candidate, you can both agree to replace your investment instrument with their choice (e.g. going from a capped SAFE to a priced round or a convertible), but for many angels and early-stage investors, they will appreciate you having an investment ready document to sign.

Ah, nothing says industry standards as a Canadian YC post-cap SAFE!

6.      Five decks, financial mode, investor FAQ, instrument, VC Investment memo

Going into level 6, you should now have most decks ready (Pitch deck, Investment Teaser and Executive Summary and Short Deck B, First Meeting deck), as well as model, FAQ and instrument. Next,  you want to dig into those midnight hours and develop your Long Deck. The Long Deck, or Complete Investment Proposal, easily counts 20-100+ slides. We frequently see them at 45-50 slides. This deck is supposed to give your investors the opportunity to review in piece, read through every slide in detail – without having any founders present in the room. This is your full package, and should be packed with numbers, stats, KPIs and financial data. You might want to put this inside a data room, but in practice, a password protected DocSend is the way to to go.

At this stage, you also want to develop your VC investment memo. To many founders – and some investors – this might seem like a strange deliverable. After all, why should the founders spend time to write up a 20-30 page VC investment memo?

Well, we propose two main reasons for why this makes a lot of sense. First of all, for the founders to putting in the work and truly structure their work, strategy, go-to-market, long-term capital strategy, team bios, investor returns and deal outcomes, it provides the founders with structured depth and insights on their own company.

Second, one of the real-life bottle necks your VCs have is time, often more than capital. “We’d love to engage, but we just don’t have the bandwidth”, is a common phrase. Well, if you can provide them with a strong VC investment memo, you can easily save them 15-20 hours of time, and maybe, just maybe, be able to tip them over to looking closer on your deal.

Again, not sure where to start?

Try out this Claude Prompt:

“Please write up a world-class venture capital investment memo on our startup. Make sure to include: Executive summary, clear investment rationale, market overview, problem, solution, business model, traction, team, competitive landscape, KPIs and traction to date, long-term capital strategy, cap table analysis, deal analysis, round structure,  investor outcome analysis, exit strategy and exit scenarios. Feel free to add or highlight other things you believe is key to developing a world-class VC memo.

Name: (insert), URL: (insert). All pitch decks and key financials attached.

Anyone can be a VC. Start by writing your own VC Investment Memo.

7.      Six decks, model, FAQ, instrument, memo, shareholder agreement, cap table

OK, going to level 7, you are now truly maturing your investor materials. At this stage, you develop all six decks (Executive summary, Teaser deck, Pitch deck, Meeting deck, Introduction deck (investment teaser) and Long deck (Investment proposal). You got a solid financial model, FAQ, investment instrument. You got the VC memo.

Now you are adding the legal documents, namely Shareholder agreement and cap table (make sure to track this fully diluted) Granted, this should also have been included in the decks above and definitely the VC memo, but often, it is left out.

8.      Six decks, model, FAQ, instrument, memo, SHA, cap & full data room

Finally, our last level, level eight. Now, you got all decks, financials, FAQ, instrument, VC memo, SHA and cap table. The only thing remaining; your data room, or VDR, Virtual Data Room. Many founders think about this as a data dump, a file repository. Smart founders understand differently. Smart founders design the data room through the lens of a world-class investor (customer) journey. “How can we make this a top-notch experience?”, “How can we use the data room to delight and impress investors”.

Here are three tips:

  • Make the structure easy to understand and navigate
  • Use guiding text to intro each main chapter or folder “In this folder you will find X, Y, Z. Make note of folder YY and ZZ”
  • Shoot introduction videos (Loom recordings) for each key part, always with the user’s journey in mind
Wanna build a data room? Use this as your guiding checklist

Closing out: from deck to investor ready materials

As I’m writing this, we are working hands on with 200+ founders across North America, MENA and Europe on different programs on Investor Readiness. This post if for you.

We hope this can serve both as an inspiration and checklist for the work you are all doing.

Next, we invite you to dig into the Funding Journey, where you can study the five phases and 43. Steps to close your next funding round.

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Welcome to Scale Up! Train-the-trainers

Hi there,

So, you are getting ready to embark on the Scale Up! Train-the-Trainer? Exciting! This can be truly life-changing for your professional career!

Before you begin, here’s a couple of points you might like to know.

Scale Up! online format, with Katapult accelerator, Nov 2021

Part I: Ten fast facts

1.      What is Scale Up? Scale Up! is a methodology to develop entrepreneurs, founders, angel investors, accelerators, incubators, VCs and ecosystem developers. The Scale Up! Methodology is based on 20+ years of experience supporting 1000’s of high-growth startup founders from pre-seed to post-IPO. The methodology is built on ‘working visually’, with a series of visual canvases and the visual Scale Up! kit.

2.      What’s the core idea behind Scale Up!? In Scale Up! participants form teams and compete through the Founder’s Journey, taking a company from idea to successful exit. For most people,  we do around 8-10 years in just three days.

3.      How is Scale Up! delivered? In-person or online (using Miro and Zoom)

4.      How can Scale Up! be run? Your imagination sets the only limitations; we describe seven different ways you can run Scale Up! We prefer the 3-day format, but half-day, one-day, two-day, five day or even 3-month formats are possible. It’s really up to you.

5.      How many people have been through Scale Up!? Globally, ca. 4.500 to date

6.      How many countries have Scale Up! been run so far? 50+

7.      How many expert facilitators are there? ca. 70+

8.      How many Scale Up! version are there? – Scale Up! (1.0) – Scale Up Angel! – Scale Up MENA! – Scale Up Africa Rising! – Scale Up Europe! (launching in 2026). More coming…

9.      Who developed Scale Up!? Chris Rangen and his colleague Jolene Foo-Hodne was working with Innovation Norway, the Norwegian national innovation agency on a national program. This collaboration led to the first Scale Up! back in 20218.

10. Who can run Scale Up!? Globally, anyone can learn to run Scale Up! To date, faculty, VCs, accelerator staff, coaches and consultants have all learned to run Scale Up! With a bit of training and willingness to learn, anyone can.

Founders, investors, ecosystem builders – all benefitting from Scale Up!

Part II: Two types of knowledge

The two sets of expertise you will develop For anyone running Scale Up!, there are two skillsets you need. We count these on a one to five level, from beginner to expert.

Domain knowledge Domain knowledge is how much you know about the content, the term sheets, the deal structures, the cap table math and how to bring together a 2M @4M post SAFE, with a 500.000 @3M pre equity round, while also keeping the initial angel investors happy and structuring a 12% post-round ESOP.

Domain knowledge is important. It is what you know. It is the foundation you use to teach, coach and mentor others. Everyone should strive to develop their domain knowledge.

But domain knowledge alone is not enough.

Facilitation knowledge Next, you have faciliation knowledge, or really faciliation skills. How comfortable are you with structuring programs, designing multi-stakeholder workshops and facilitating high-paced masterclasses? Can you manage large groups, in both online and in-person formats?

Can you use your voice well? Can you give instructions clearly? Can you design a workflow to keep people engaged over multiple days?

For most of us, these two sets of skills is something we work on constantly, day in and day out. You never graduate, you just keep getting better and better over time.

Getting to level five ….takes real, genuine work

Part III: The five core topics you will master

Our train-the-Trainer is designed around five core topic areas. Each represents a critical piece of the puzzle every Scale Up! Expert Facilitator needs to handle with confidence.

1. Founder’s Journey From IPO dreams to the messy realities of taking a company public, you will learn to guide participants through every twist and turn. This is the backbone of Scale Up! – understanding what founders actually go through from idea to exit. Can you tell stories, of success and failure from across the Founder’s journey?

2. Term Sheets 600+ term sheets. SAFE notes. CLAs. Priced rounds. Liquidation preferences. You will learn to read, understand, and explain even the most complex investor term sheets. Did you know there is such a thing as ‘too many term sheets’? You will.

3. Cap Tables From foundational equity to Series K dilution, cap table mastery is non-negotiable. You will learn to help founders understand how their equity evolves – and how to protect it.

4. Ten Steps to Scaling Up This is where strategy meets execution. Scale up mindset. Exit planning. Equity management. ARR velocity. Team development. Market expansion. Customer discovery. Financing. Product development. Scaling with AI. Ten interconnected elements that determine whether a startup stays stuck – or scales.

5. Liquidity & Exits The ultimate question: how do you return value to investors? M&A, IPO, secondary transactions, partial liquidity – you will learn to facilitate conversations most founders have never had. Combined, these five are the core topics you need to study up on to build out your domain expertise.

Scale Up! Train-the-trainer Structure

Part IV: Three levels of development

Here’s the thing about becoming a Scale Up! Expert Facilitator. It’s not about reading a manual. It’s about a progression through three distinct levels.

Knowledge This is where you start. Learning the content. Understanding the frameworks. Reading term sheets. Studying cap table math. Getting fluent in the visual canvases, the Founder’s Journey, the Investor Map, the Rocketship Canvas. You are building the internal library that allows real improvisation later.

Confidence Knowledge is not enough. Confidence comes from running programs. From co-facilitating with masters. From leading a full simulation and experiencing what it feels like when things go sideways – and learning to recover. This is where the nervous system develops. Where you learn to sense what a room needs, moment to moment.

Mastery Master facilitators create unseen structure and invisible support. They make profound learning look effortless. They adapt mid-session to emerging themes without losing coherence. They know when the ‘wrong’ conversation is actually the most important one. Mastery is not perfection – it’s the hard-won ability to orchestrate genuine transformation.

Scale Up! online format, Nov 2021

Part V: What a typical Scale Up! session looks like

Here, we use a three-day format. You can of course mix and match this around to best suit your format. You can easily adapt to a one-day format, two-day or even five-day.

Day 1: The Foundations

The Welcome session kicks off with the Founder’s Journey, Investment instruments and Foundational equity. You will dive into Strategy 101, Pre-seed/seed stage dynamics, ESOP structures, Term sheets, Investor mapping, Product development and Pitch deck fundamentals.

By the end of Day 1, teams will have navigated 30+ term sheets across 2-5 rounds, managing raises from 1M – 10M at valuations of 10M – 30M. Boom cards. Bust cards. Burn rates from 10.000 – 100.000. Welcome to the founder’s reality.

Day 2: Scaling Up

Day 2 opens with a Pitch session. Now you take teams into venture territory. Sales organization. Market expansion. Long-term capital strategy. 3x Value uplift. Boards & governance. Rocketship canvases. LinkedIn positioning. Complex term sheets. SAFE conversion mechanics. Product mastery. Investor liquidity & returns. Outcome canvas analysis.

The complexity ramps up. Each team should see term sheets: 30-40. Rounds: 3-5. Raises: 20M – 100M. Valuations: 100M – 500M (and pushing toward 1BN). Boom: 10-30. Burn rate: 500.000 – 5M. This is where scaling founders separate from starting founders.

Day 3: Growth & Exit

The final day opens with an Outcome pitch. You are now in growth stage territory. Global leadership. Market expansion. Margin expansion. Investor questions and power dynamics. M&A strategies. Liquidity transactions. IPO readiness. Exit transactions.

The stakes are highest here. M&A: 0-3 deals. Term sheets: 20-40. Rounds: 1-5. Raises: 50M – 1BN. Valuations: 10M – 30M? Not anymore – we’re talking multiples higher. Boom: 10-15. Burn rate: 10M – 20M. This is where winners are made.

A full-size Scale Up! program structure

Part VI: Quick reads

Who attends a Scale up Program? Read it.

Who buys Scale Up? Read it.

Evolving Scale Up! Read it.

The Scale Up Angel E-mail Read it.

The four cap tables in Scale Up! Read it.

Scaling Up in MENA: The Most Common Investment Instruments Read it.

Can you run the cap table? Read it.

Scaling up in MENA! Read it.

Ten Books That Will Save You From Costly Cap Table Mistakes: A Reading List for Founders, advisors & expert facilitators Read it.

From student to master: how Enrico Maset become one of the world’s leading Scale Up Experts Read it.

Setting up, Scale Up MENA! TTT, Dubai, Nov 2025

Part VII: Selected case studies

How Katapult Accelerator Gets Its Startups Investor-Ready Read it here.

Scaling up in the rising Egyptian ecosystem Read it here.

Helping Madica’s pre-seed startups bridge the scaling chasm Read it here.

Scaling to exit with Dubai Future District Fund Read it here.

Bridging the Capital Chasm Read it here.

Term sheet focus, Egypt, Sep 2024

Why This Matters

Globally, over 70 people are now trained and certified to deliver Scale Up! programs. They work in 50+ countries. They’ve taken nearly 4.500 founders, investors and ecosystem builders through the journey.

As an Expert Facilitator, you will join this global community. You will gain the ability to transform how founders think, how investors evaluate, how ecosystems develop.

The best part? The journey from Learn to Run to Apply to Fly is one of the most rewarding professional development paths you can take. Each program you deliver, you get better. Each challenging term sheet negotiation you facilitate, you grow. Each breakthrough moment you witness – a founder finally understanding their cap table, an investor seeing the power dynamics differently – reminds you why this work matters.

One day, this will all be yours…

Ready?

The Scale Up! Train-the-Trainer is not a certification you collect. It’s a capability you develop. A community you join. A journey you commit to.

From Knowledge to Confidence to Mastery. From Day 1’s foundations through Day 3’s exits. From your first nervous co-facilitation to the flow state of mastery.

Are you ready to help more founders scale?

Let’s go.

Looking forward to working with you!

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Nine ways to run Scale Up!

This year we expect to train and certify 50-60 Scale Up! expert facilitators. If you are one of them, here are nine ways you can run Scale Up!

Accelerating entreprenurship with Scale Up!

Globally, 1000’s of founders, investors and ecosystem developers have built their ‘scale up skills’ with Scale  Up! From introduction to cap table math, accelerating seed-stage founders or training investors on deal structures, partial liquidity mechanisms and IPO readiness, over the years we have seen a broad range of use cases of Scale Up!

Expert Expert facilitators like Scott B. Newton, Rick Rasmussen, Rumbi Makanga, Enrico Maset, Sanjana Raheja and many, others are pushing to create new best practices in Scale Up! delivery.

African accelerators, European family offices, Middle Eastern fund-of-funds, Nordic innovation clusters, US business schools, global impact accelerators and global entrepreneurship organizations are just some of the 100’s and 100’s of users who have picked up Scale Up! in recent years; but how can you run Scale Up!?

Well, in our work, we have identified nine different ways you can run Scale Up!

Before we start

Before getting into the details, the first question is always, “are you running this online or in-person”.

Scale Up! has been delivered 100’s of times in both formats. But what are you planning?

Some people strongly prefer the online version, noting the flexibility of adding new content, combined with nobody needing to travel. For many, the online format can be perfect. Others prefer the in-person setup. Being in the same room together. More energy, more collaboration, more engagement, more teamwork.

There is no right or wrong, it’s simply up to you, which format you prefer.

In-person, Bergen Norway vs. Katapult Impact Accelerator, online. Same, but different.
1.      “Bits and pieces”

Duration: Varies, from 30. Minutes to days

Format: online or in-person

Example: Hatch Founder Workshop

The “Bits and pieces” format allows you to extract certain pieces from the Scale Up! kit and work with it, without having to run the entire simulation.

This is great if you are running shorter sessions, focused workshops or want  to zoom in one a certain topic, without bringing the full kit. Expert facilitators like Enrico or Javier, regularly use the Scale Up! Strategy cards in founder coaching conversations, while I run multiple exercises for founders on the Investor Map and Long-term funding roadmap, combined with a handful of Scale Up! Investor cards.

There is no one best way to run this, feel free to mix and match the bits and pieces as you see fit.

Long-term Funding Roadmap, using investor cards from Scale Up!, Hatch Accelerator, Sep 2023

Or, if you prefer the in-person format.

Completing the Long-term Funding Roadmap, using Investor Cards from Scale Up! Innovation Norway, Sep 2023
2.      Discovery

Duration: 2-3 hours

Format: Light, easy, introduction level

Example: Strategy Tools hosted online discovery session

Imagine having friends over for dinner, and all you serve them is an appetizer and that’s it. That’s a Discovery session for you. It is a taster. Nothing more. But for most people, it is great way to get a first taste, a first chance to see Scale Up! in action. Just be clear on format and expectations. This is not a full program. It not even a full introduction. But for a couple of hours, it serves as a great appetizer.

Scale Up! Discovery session, online, July 2024
3.      Pilot

Duration: 1 day

Format: Beginner and intermediate, introduction focused

Example: Scale Up MENA! pilot in Dubai

Pilots are a great way to get people introduced to and initially started on Scale Up!

A good pilot session is usually a full-day (5-8 hours), something most founders can carve out time for. A good pilot will have four sections throughout the day. – Welcome & introductions (20. Minutes) – Opening lecture (30. – 90. Minutes) – Hands-on, in teams, running Scale Up! (3-6 hours) – Debrief, next steps and how to move from pilot to full program

We recommend most new facilitators to plan for 5-20 Pilot sessions per year, as it has proven to be a great way to get going with Scale Up! in a new market or ecosystem. Most founders, once they have tried a pilot session, usually want more  – and soon.

100+ founders met Scale Up MENA! through a series of pilots in Dubai in November 2025
4.      Workshop

Duration: 1-3 days

Format: varies from light, entry-level, to advanced, depending on the group

Example: 2-day Scale Up! workshop with the Ocean Startup Project in Canada , or 1-day with EO Dubai.

The workshop format is standard, full-scale delivery. But a workshop tends to be shorter, slower and less advanced in terms of content than a Masterclass. We have done 100’s of workshops. They are great. But think about workshops as the little brother against the Masterclass.

In a workshop format, you would aim to run Scale Up! from start to successful exit (end); but you have more flexibility in terms of content (take things out), pacing (slow things down), and adjust to the topics the group wants to focus on. A workshop is a very flexible format.

Often, the workshop format ties well into ongoing client engagements, where you decide to run Scale Up! as a part of a larger engagement. We frequently do this with angel networks, family offices, incubators, accelerators and ecosystem developers with great effect.

What Canadian ocean founders said, Nov 2021
5.      Masterclass

Duration: 2-3 days (3 days recommended)

Format: advanced level, complex, fast-paced, challenging, but also incredibly engaging

Example: Bahrain, DNB, Dubai, Cairo and many, many more

A Masterclass is an advanced, fast-paced, stand-alone delivery of Scale Up! It usually runs over three days, in some cases 2,4 or even 5 days.

What makes a Masterclass stand out is the full-on pace, advanced content and focus on taking all teams through the best possible experience we can.

A Masterclass is planned down to every 15. Min slot, and covers a number of Founder Tasks, Breakout exercises and Strategy Tools canvases.  A robust Masterclass will take participants through every step of the scaling up journey, and focus significant attention on the later-stage issues, such as Outcome Canvas, partial investor liquidity and a full exit transaction. Depending on the level of the participants, an exit transaction can end out in a ‘quick M&A’ (takes around 20. Minutes to complete) or a full-scale IPO process (takes around 3-4 hours to complete).

Personally, the 3-day Masterclass is my favorite format, as participants tend to lean in, work hard and we can see massive progress with just a few days of work.

Three day, Scale Up! Masterclass, Bahrain, April 2024
6.      Program

Duration: 30-90 days, could be more

Format: Usually quite advanced, depending on the group. Covers a broad range of topics, with Scale Up! being very central.

Example: 30-day Investment Readiness program with Katapult Accelerator, Savant Accelerator, Link Capital or GIZ

A program structure means Scale Up! is just a small piece in a larger entreprenurship program. This can be a one week program, a four week program, a 90-day program or longer. With Katapult, we run a 30-day, high-intensity program.

In a program format, we usually plan for Scale Up! as one of the cornerstone activities, but we also plan for a lot more work and content than just Scale Up! Over the years, we’ve run a significant number of the 30-day Investor Readiness Sprint, a 30-day, intense, packed program to get founders truly investor ready, and radically increase their chances of successfully raising their next round of equity investment. In this format, we recommend founders to allocate 100-150 hours per startup team, with Scale Up! taking less than 15 hours.

In your work, you can probably see many program structures where Scale Up! can be a small piece of the bigger picture.

In a program format, like the 30-day Investor Readiness Sprint, Scale Up! is just a small piece in a larger puzzle
7.      Education

Duration: From one day to a full semester

Format: Depends on learning goals, levels and target outcomes.

Example: FHV, Northwestern, ESCP and many, many more levels: Scale Up! is used in educational programs from High School (Canada), Business School (Europe and the US) and technical universities (Europe)

The first time we brought Scale Up! into a classroom was in Dornbirn, Austria (truly, in the Austrian alps) in October 2021. Since then, 100’s and 100’s of entrepreneurship students have experienced Scale Up! as a part of their educational programs.

In Canada, Stuart and Michael have been running an innovative space tech x Scale Up! high school program, as well as multiple university programs. In Germany, Austria and Italy, Enrico has been teaching with Scale Up! across programs. In Silicon Valley, Rick has been educating future startup founders with Scale Up! In London, Vishal is teaching entreprenurship with Scale Up!

Rick, Chris (and Enrico), teaching entrepreneurship in the Austrian alps
8.      Multi-year programs

Duration: Runs into years

Format: Varies significantly, but usually several Scale Up! sessions over time

Example: Reinventing the Norwegian innovation cluster program

A multi-year program might take the shape of a larger ecosystem development initiative, a national transformation program, a business angel development program or simply upskilling

In Norway, from 2017-2021, we ran a multi-year program on reinventing the national, Norwegian innovation cluster program. Here, Scale Up! was a cornerstone in the project. Over these 4-5 years, we probably ran 30 Scale Up! sessions of different lengths and formats. In Cairo, working with Tiye Angels, we run a multi-year program covering early-stage founders, scaling founders, angel investors and ecosystem coaches.

For anyone who might have a chance to plug Scale Up! into a multi-year development program, expect to see huge improvement in your own expertise and mastery in how you run Scale Up!

Looking ahead, we can see many forms of these multi-year programs:

  • Boosting the Nordic tech ecosystem
  • Scaling the European startup ecosystem
  • Taking the UAE and MENA ecosystem to the next level
  • Upskilling a generation of startup founders in Saudi Arabia – Developing stronger financial and fundraising skills in South East Asia
  • Boosting accelerators and Business Support Organizations in Latin America
  • Building deep skills in entreprenurial finance, cap tables and fundraising in Africa

These are just a handful of the Scale Up! multi-year programs we would love to see coming up, led by you, as the new expert facilitators.

Early-days, bringing Scale UP! into the Norwegian innovation cluster program, 2019-2020
9.      Train-the-trainers

Duration: From a few days to multiple months

Format: Blended, online or in-person (most do blended)

Example: Scale Up MENA! TTT, Strategy Tools Master Trainer, Katapult TTT

One day, hopefully, some of you might want to start training and supporting new Scale Up! expert facilitators in your ecosystem. Go for it! One of the best ways to learn is by teaching others.

We have taught, trained and certified 70+ Scale Up! Facilitators, closer to 300 if we count everyone that has been through the Train-the-trainers, but not necessarily taken up Scale Up! as a professional track.

In your case, if you have an accelerator team, local business school faculty or a network of consultants and investors you work with; go for it. Put together a new, innovative Train-the-trainers program in your ecosystem, or let’s work together with you running our standard TTT program, in your part of the world.

Who knows, maybe you will be the one to unlock 100’s of new Scale Up! facilitators, you just don’t know it yet.

Train-the-trainers, or expert-level certification, we have trained 100’s of people in running Scale Up! Maybe you will too?

The best way? Just get started

In this blogpost we have outlined ten ways you can run Scale Up! From classrooms to workshops, from multi-year programs to discovery sessions; the choice is yours.

Scott B. Newton in action, Dubai, June 2023. Be more like Scott.

Regardless, the best way to run it is simply getting started. Enrico, one of our most experienced Scale Up! facilitators, once said, that new facilitators (like yourself) should aim to run 20 sessions, minimum, in the first year. With 20 sessions, you build muscle memory, confidence and quickly gain mastery.  Just get started.

On our end, we are excited to see what you will do with Scale Up! in the coming years – ultimately supporting startup founders to build and scale better companies in your part of the world.

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Should Exit Thinking Be Mentioned in Your Term Sheet?

When startup VC exits does not happen by themselves, what’s a VC to do? Exploring the topic of discussing liquidity and exit strategy at term sheet level.
First article leading up to the upcoming Dune Venture Days in Dubai.

The Exit Gap in Most VC Markets

Across MENA, Africa, and Europe, venture capital ecosystems share a common challenge: the path to liquidity remains uncertain, unpredictable, and often an afterthought. In MENA, startups have raised over $11 billion since 2021, yet fewer than 7.5% have achieved exits. Africa recorded only 26 venture-backed exits in 2024, returning just $0.13 per invested dollar. European secondary markets, while more developed, still leave many GPs scrambling when fund lifecycles demand returns.

The numbers tell a challenging story. The VC markets across MENA, Africa and Europe are all maturing, evolving, even booming in the case of MENA. Deals are happening, new funds are being set up, but…….. everyone is also waiting on liquidity and DPI.

This raises a fundamental question: Should exit thinking be embedded directly into the term sheet itself?, or more precisely, how should liquidity strategy be presented in your term sheet?

The GP Exit Canvas: A Framework for Strategic Exit Planning

The GP Exit Canvas, developed through extensive work with fund managers across global VC markets, provides a structured visual framework for integrating exit strategy thinking from day one of the investment process. It consists of nine interconnected building blocks:

GP Exit Canvas

Building Block

  1. Pre-Deal Assessment

How do we work on exits in our pre-deal assessment?

2. Key Documents

What exit items do we use in term sheets, shareholder agreements, and exit memos?

3. Exit Strategy BOD Day

How do we design and deliver an annual board exit strategy day?

4. Mapped Out Exit Paths

How well do we map out exit paths for each portfolio company?

5. Exit Committee

How do we setup and run an exit committee years ahead of a transaction?

6. GP Exit Team

Do we have team members dedicated to exits?

7. Exit Advisors

Who are the right exit advisors for our portfolio companies?

8. Exit Network

How large is our relevant exit network and how can we grow it?

9. Exit Dealmaking

Are we successful in completing exit transactions?

Notice that “Key Documents” sits prominently in this framework. The canvas explicitly asks: What are the key exit items we use for the company’s legal and strategic documents? Do we use a tiered exit model at various company stages? This is where the term sheet becomes a critical tool for exit planning.

The VC Debate: Should Term Sheets Include Exit Provisions?

The question of whether to include explicit liquidity and exit provisions in term sheets divides opinion among fund managers. Let’s examine both sides.

The Case Against

Premature constraints on founder optionality. Critics argue that embedding exit timelines into term sheets creates rigid structures that may not serve the company’s best interests. Markets shift, opportunities emerge unexpectedly, and what looks like the right exit path at Series A may be completely wrong by Series C. Founders need flexibility to pursue the best outcomes, not contractual obligations that force premature decisions.

Potential misalignment with founder vision. Some founders view explicit exit provisions as a signal that investors are more focused on their own returns than building a truly transformative company. This can create tension from day one and may deter founders who are building for the long term.

Negotiation complexity. Adding detailed exit provisions increases the complexity of term sheet negotiations, potentially slowing deal velocity and adding legal costs at a stage where founders often have limited resources.

The Case For

Alignment from day one. Proponents argue that discussing exit paths early actually creates better alignment between founders and investors. When both parties understand and agree on potential liquidity scenarios, there are fewer surprises later. As the GP Exit Canvas emphasizes, exit planning isn’t separate from investment strategy—it is investment strategy.

LP pressure demands clarity. Limited Partners are increasingly demanding DPI (distributions to paid-in capital) rather than just paper returns. In markets like MENA and Africa, where exits are scarce, LPs want to see evidence that GPs have thought through liquidity paths before committing capital. Having exit provisions in term sheets signals sophistication and planning.

Structuring for market realities. In regions with underdeveloped IPO markets and fewer strategic acquirers, secondary sales and tiered liquidity models often represent the most realistic path to returns. Building these mechanisms into deal structures from the start ensures they can be executed when opportunities arise.

Creating exit-ready documentation. When exit opportunities emerge, deals often fail because documentation isn’t ready for institutional buyer due diligence. Term sheets that anticipate exit requirements—drag-along rights, tag-along protections, information rights—create companies that can move quickly when windows open.

The Verdict: Yes, With Nuance

The evidence is clear: paths and timelines to liquidity are key for VCs and should be covered in term sheets. However, this doesn’t mean imposing rigid exit schedules or forcing founders into narrow outcomes. Instead, it means creating flexible frameworks that acknowledge the importance of liquidity while preserving optionality.

The most successful VCs think backward from liquidity events when making investment decisions. As the GP Exit Canvas demonstrates, this backward-thinking approach should be embedded in every aspect of the investment process, including the foundational document that governs the investor-founder relationship.

For emerging market funds, where smaller pools of potential acquirers and less developed exit markets create additional challenges, the discipline of incorporating exit thinking into term sheets can mean the difference between a successful fund and one that struggles to return capital to LPs.

Three Liquidity Mechanisms: Sample Term Sheet Language

Below are three examples of different liquidity mechanisms that can be incorporated into term sheets, each suited to different investment contexts and portfolio company stages.

1. Strategic Acquisition Facilitation Clause

Context: Appropriate for early-stage investments where strategic M&A is the most likely exit path, particularly in sectors with active corporate acquirers (fintech, healthtech, agritech).

SAMPLE TERM SHEET LANGUAGE

Exit Strategy Facilitation

Strategic Exit Support: Upon the Company achieving annual recurring revenue of [USD 2,000,000] or cumulative revenue of [USD 5,000,000], the Investors shall actively facilitate introductions to potential strategic acquirers identified in the pre-investment Exit Path Assessment. The Company shall maintain an updated list of no fewer than fifty (50) potential strategic acquirers, reviewed and updated at each Board Exit Strategy Day.

Exit Readiness Milestones: The Company agrees to achieve “exit-ready” status within thirty-six (36) months of closing, including: (a) completion of SOC 2 Type II certification or equivalent, (b) audited financial statements prepared in accordance with IFRS, (c) documented regulatory approvals and compliance records, and (d) clean cap table with all option grants properly documented.

Drag-Along Rights: In the event of a bona fide acquisition offer valued at or above [3x] the post-money valuation of this round, approved by (i) a majority of the Board of Directors and (ii) holders of a majority of the Preferred Stock, all shareholders shall be required to participate in such transaction on the same terms and conditions.

Information Rights for Exit: The Company shall provide Investors with monthly operating metrics in a format suitable for potential acquirer due diligence, and shall grant Investors reasonable access to management for the purpose of facilitating strategic discussions with potential acquirers, subject to appropriate confidentiality protections.

2. Tiered Liquidity Model (1/3, 1/3, 1/3 Structure)

Context: Designed for growth-stage investments where the investor seeks to manage risk and generate early DPI while maintaining upside exposure. Particularly relevant in MENA and Africa where full exits are rare but secondary markets are developing.

SAMPLE TERM SHEET LANGUAGE

Tiered Liquidity Structure

Liquidity Schedule: The Investors’ shareholding shall be subject to the following tiered liquidity framework, designed to balance early returns with continued participation in Company growth:

Tranche 1 – Series B Secondary (One-Third of Position): Upon completion of the Company’s Series B financing round at a pre-money valuation of at least [3x] the post-money valuation of this round, the Investors shall have the right (but not the obligation) to sell up to one-third (33.33%) of their shareholding to incoming investors or approved secondary buyers. The Company shall use commercially reasonable efforts to facilitate such secondary sale as part of the Series B transaction, including allocating reasonable capacity in the round for secondary purchases and providing necessary documentation and representations.

Tranche 2 – Pre-IPO/Series D Secondary (One-Third of Position): Upon completion of a Series D financing round or a pre-IPO financing round at a pre-money valuation of at least [8x] the post-money valuation of this round, the Investors shall have the right to sell an additional one-third (33.33%) of their original shareholding (or 50% of remaining position) through secondary sale mechanisms. The Company agrees to include standard secondary sale provisions in its Series D or pre-IPO documentation, and shall not unreasonably withhold consent to transfers to qualified institutional buyers.

Tranche 3 – Ultimate Exit/IPO (Remaining Position): The Investors’ remaining shareholding (one-third of original position) shall be held until the Company’s ultimate liquidity event, whether through IPO, strategic acquisition, or other qualifying exit transaction. In the event of an IPO, the Investors agree to customary lock-up provisions not exceeding one hundred eighty (180) days, following which they may dispose of shares at their discretion.

Valuation Floor Protection: The secondary sale rights described in Tranches 1 and 2 above shall only be exercisable if the applicable round valuation represents at least a [2.5x] multiple on the Investor’s cost basis for Tranche 1, and a [5x] multiple for Tranche 2. If such thresholds are not met, the secondary rights shall roll forward to the next qualifying financing round.

Company Facilitation Obligation: The Company shall designate a member of senior management responsible for coordinating secondary sale processes and maintaining relationships with secondary market platforms and qualified buyers. The Company shall not impose transfer restrictions or exercise rights of first refusal in a manner designed to frustrate the Investors’ exercise of the rights described herein.

3. Redemption and Put Option Mechanism

Context: Appropriate for later-stage investments or situations where market exit uncertainty is high, providing investors with a guaranteed liquidity path while giving the Company flexibility on timing.

SAMPLE TERM SHEET LANGUAGE

Redemption and Put Option Rights

Redemption Right: Commencing on the sixth (6th) anniversary of the closing date (“Redemption Date”), and upon written request from holders of at least a majority of the then-outstanding Preferred Stock, the Company shall redeem the Preferred Stock in three (3) equal annual installments at a price per share equal to the greater of: (a) the original purchase price plus any accrued but unpaid dividends, or (b) the fair market value as determined by an independent valuation conducted by a mutually agreed third-party valuation firm.

Put Option: In the event that no qualifying liquidity event (defined as an IPO, strategic acquisition, or secondary sale opportunity at or above [2x] the original purchase price) has occurred by the fifth (5th) anniversary of closing, the Investors shall have the right to require the Company to facilitate a sale of the Investors’ shares to (i) existing shareholders, (ii) the Company (subject to legal restrictions), or (iii) third-party buyers identified by the Company, at a price equal to the higher of (a) [1.5x] the original purchase price or (b) fair market value as determined by independent valuation.

Company Call Option: The Company shall have the right, but not the obligation, to call and repurchase the Investors’ shares at any time after the fourth (4th) anniversary at a price equal to the higher of (a) [2.5x] the original purchase price or (b) fair market value. This call option shall expire upon the occurrence of a qualifying liquidity event.

Exit Window Coordination: The Company agrees to engage an investment bank or M&A advisor to conduct a formal market assessment of exit opportunities no later than the fourth (4th) anniversary of closing, with the results of such assessment to be shared with the Board of Directors and used to inform liquidity planning discussions.

Note to self, work with fancy lawyers on exit terms; but start on day 1. You don’t need to wait for year 8 to begin….

Implementing Exit Thinking: Practical Steps for GPs

The GP Exit Canvas provides a comprehensive framework for making exit planning systematic rather than sporadic. When implementing exit provisions in term sheets, consider these principles:

Start the conversation early. Use the pre-deal assessment phase to discuss exit scenarios openly with founders. This conversation will inform which term sheet provisions are most appropriate and help identify potential misalignment before it becomes a problem.

Match provisions to context. A fintech startup with clear strategic acquirer interest needs different provisions than a B2B SaaS company targeting eventual IPO. The three examples above illustrate this range—use them as starting points, not templates.

Build in flexibility. The best exit provisions create optionality rather than obligation. Rights to sell don’t mean requirements to sell. Valuation floors protect against fire sales while preserving upside.

Integrate with governance. Exit provisions in term sheets should connect to ongoing governance mechanisms—annual Exit Strategy Board Days, exit committees, and regular exit readiness assessments as outlined in the GP Exit Canvas.

Communicate with LPs. When raising your next fund, point to these term sheet provisions as evidence of your systematic approach to liquidity. LPs increasingly want to see DPI, and demonstrating that you’ve built exit thinking into your investment process from day one differentiates you from GPs who treat exits as an afterthought.

Conclusion

In venture capital, capabilities compound over time into competitive advantages. Funds that embed exit thinking into their term sheets—and across all nine elements of the GP Exit Canvas—build a systematic capability that serves portfolio companies, LPs, and their own track records.

For fund managers operating in MENA, Africa, and Europe, where exit markets remain challenging but opportunities are growing, this systematic approach isn’t optional—it’s essential. The term sheet is where that discipline starts.

The most successful venture capital firms don’t just pick winners; they systematically create the conditions for winning exits. Make your term sheet part of that system.

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About Dune Venture Days: Welcome to the first edition of DUNE Venture Days: a complimentary, invite-only venture capital gathering designed for a curated group of VCs, startup investors, and ecosystem leaders.

DUNE will take place in partnership with Dubai CommerCity and alongside the WORLDEF Dubai 2026 Conference.

DUNE is 100% complimentary. It is simply about giving back to the VC ecosystem — a moment to strengthen existing relationships, build new ones, and bring together people we genuinely enjoy exchanging ideas with. Apply to join at Dune Venture Days.

Welcome to Dune Venture Days

About the GP Exit Canvas: The GP Exit Canvas is part of the Venture Capital Series developed by Strategy Tools. Download the canvas and explore additional resources at www.strategytools.io.

About the Author: Christian Rangen is a strategy advisor and business school faculty member who works with VC/PE firms, fund-of-funds, DFIs, and governments on venture capital ecosystem development. He delivers VC Masterclasses and mentors fund managers globally.

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Facilitator, running Digital Scale Up? Here are 14 questions to help you prepare for a great session

Having run 100’s of Strategy Sims Masterclasses we’ve learned how to best plan and structure a program for maximum value to the participants. One way of increasing the value, is to ensure that you, the facilitator and your team are sufficiently prepared . here are 14 questions you can ask yourself, if you are preparing to run a session – with a focus on digital.

Note, in this article we focus on Scale Up!, but the structure is equally valid for Fund Manager!, Transform! or any of the other Strategy Sims.

Scale Up! fact box Scale Up! comes in multiple editions: – Scale Up! (Global) – Scale Up Angel! – Scale Up X! – Scale Up MENA! – Scale Up Africa Rising! – with more editions due out 2026

This is your universe to manage.
1.      Who are your participants?

What’s their level? What’s their expectations? How well do you know the participants you will be working with? Make sure you have a deep understanding of your audience, and truly design a program with their level and expectations in mind.

Not sure who you will be meeting? That’s okay; run two webinars in advance to get to know them.

2.      What’s your framing?

How do you position this? Short, fun session? Learning opportunity for beginners? Advanced-level “I will teach you…” vs. “I expect you to handle everything we throw at you…”?

Personally, I like to frame Scale Up MENA! with “Can you outperform Careem? $3,2BN exit in 7 years. Can you beat it? Good luck” For Africa Rising!, we use Moove. “Can you outperform Moove? From Africa to the world. From pre-seed to $100M with Uber. Can you top it?” For early-stage founders, maybe the framing is ‘can you avoid bankruptcy’?` Think about the framing, the narrative you want to go for.

3.      What’s the core content you want to focus on?

You only have a few hours, truly, what are you going to focus on?

Pre-seed fundraising? Global market expansion? Cap table management? Growth stage fundraising? Long-term capital strategies? Partial liquidity? Investor outcomes? IPO process? Once you know your audience, decide on your core content. This is particularly important for choice of canvases you will be using.

Investor Map, great for beginners.
Outcome Canvas – advanced groups only
4.      What’s the outcome you seek?

When participants finish, what should they be able to do or know, that they did not going into the program? What do you want them to walk away with? What are the learning outcomes? The knowledge outcomes you expect to see? Make sure to spend time on this. Get this right. Upon completion of the participants should know: – – – and they should be able to do: – – –

5. What does ‘winning’ look like?

In Scale Up!, ‘winning’ can take many forms. It is 100% up to you to decide. Got super-early-stage founders? Make it ‘first team to raise three rounds – and make it over the goal line’. Or, ‘first team to hit 10M ARR – without going bankrupt – and make it over the goal line’.

More advanced, intermediate founders? ‘Raise six rounds of financing, complete at least one syndicate and hit 10M ARR – and make it over the goal line’. Or, ‘secure the best possible exit, simply’. Late-stage, advanced founders? ‘Best exit wins’, or ‘Lead the company through, seven rounds of financing, one syndicate, 10M ARR and a successful IPO transacttion’.

Before you start, always know – and communicate – what ‘winning’ looks like.

Winning, with exits and unicorns
6. Program structure – or stand alone session?

Is this part of a larger program, likely an investor readiness program or an entirely stand-alone Masterclass? Are you running pre-session Webinars – or not? Our recommendation is generally to run one or two pre-session webinars in advance, to help participants tune in, set expectations and prepare.

Webinar 1: Introduction to Scale Up! Why we are doing this Background Three types of companies (SME, local tech, global tech, what are you building?) The Founder’ Journey – and the funding from idea to IPO Next steps (+ access to pre-read)

Webinar 2: Recap on introduction Financing the Founder’s journey Investment instruments overview Term sheets (real-life) and Investor cards Recommendations for how to best prepare (pre-read, pre-work, pre-videos)

7. Pre-read package

What are you providing the participants to read in advance? For Scale Up Africa Rising!, we are now developing the following pre-read package:

i.            Case Study: Scaling Payzhub (50+ pages)

ii.            Angel E-mail (core instructions)

iii.            Team & Roles (team setup)

iv.            Founder Handbook (explaining)

v.            Real-life SAFE note (Example)

You, of course, select your own package.

Scaling Payzhub case, when the founders were still young and naive
8.      Pre-work package

What are you putting together for the pre-work package? What are the pre-session training exercises you want people to do? Are you holding people accountable for completing it? Are you reviewing and giving people feedback before the session? Or, are you just saying ‘complete it, good luck’?

We know from experience that only 20% – 50% will complete the pre-work package, but the ones that do, will have a massive advantage and be key people on their respective teams. For Scale Up Africa Rising! Pre-work package we are doing:

I.            Founder Handbook: 10 Building blocks (exercises) (40-60 pages)

II.            Founder Workbook: Edustream (exercises) (27 pages)

Edustream workbook
9. Pre-session videos

Are you using pre-session videos? If so, who’s shooting them? What’ the key content we focus on?

The videos we would recommend are.

I. Intro & welcome video. Introducing Scale Up! Miro board overview. Walkthrough of the Miro board and how to navigate it  (15. – 35. Min). (see example)

II. Pre-session exercises. Hands on training materials (15. min). (See example)

III.            Founders Journey video (can be replaced by Webinar I)

IV.            Investment Instruments, Video (with linkage to the pre-work package) (can be replaced by Webinar 2)

Scale Up! Intro Part I. Walkthrough of the Miro board.
10.  Is your detailed program design truly ready?

Have you mapped out every 15. Min block yet? Have you pre-selected all Founder Tasks and Strategic Dilemma you want to run? Have you clearly defined ‘milestones’ for end of each day? Running a Scale Up! without a detailed program design is…. Unwise.

  • Offsites (for the roles, like CEO, CRO, CFO, etc)
  • Breakouts (for the teams)
  • Breaks (coffee breaks) (step away from the computer, for real)
  • Plenary sessions (rolling dice, moving)
  • Plenary sessions (for content, canvases, teaching)
  • Everything need to be pre-arranged, clearly mapped out.

For example, if you want teams to make any decisions, they need to be in the same breakout room together. No offsites, expect to decisions. For every 60. Min (hour), plan for minimum two, maybe even three team breakouts.

Use the Scale Up! Masterclass Design Canvas

Running a true Masterclass? Plan your program in 15. Minute blocks. Seriously.

(Did you know, In our experience, if there is no detailed design in place, we tend to cover only 60% of the plan we hoped to cover for the day. With a detailed design in place, we are pretty much at 95% – 100%.)
One-day, basic workflow, Scale Up MENA!
Three-day workflow, Katapult Accelerator, 4-hour days + 2-3 hours between sessions
Zooming in one day 2 content.
11. Have you clearly assigned roles on the facilitator team?

Who is leading the plenary and sharing screen? Who is handling cards? Who is leading the offsites? Who is jumping from room to room, to support the teams? Who is running the Investor Map, Long-term Funding Roadmap and Outcome Canvas? Who is helping teams with cap tables?

All this need to be pre-set in advance.

KO facilitator team
12. Is your logic flow in place

Scale Up! is structured around what we call the Founder’s Journey. Over a few days, we typically cover 6-10 years of ‘startup life’. Make sure your plan, your design capture this in a logical manner.

  • Every roll with the dice represent a few weeks of ‘real life founder life’.
  • Every square on the board represent ca. 9 days.
  • Every length of the board represent 3 months or 90 days.
  • Every round around the full board represent a full year.

This means, the entire first round around the board is year 1. Think about, what happens, really, in year 1. Team coming together, early customer discovery, a grant. Maybe an angel investor. Possibly an accelerator. Maybe a friends and family round. Maybe first revenue, often wrapped in a pilot structure. Possibly an advisor or two. Maybe a few new team members. That’s often it. Some companies will hit $100M ARR and level five product, go-to-market and expand into six markets, but that’s extremely unlikely. Plan for a ‘normal’ growth phase, where pre-seed, seed, seed+ and Series A takes 2-4 years, not 3-4 rolls with the dice.

An action-packed three day program; not for beginners, this one.

With an advanced group, in a three-day structure, here is how we think about the logic flow. Note, this is not suitable for early-stage or beginners, as you’ll need to move much slower on day one.

13. How much time do you allow for debrief?

Want to good ending? Always allow time for a structured debrief.

Use Miro and sticky notes or structured canvases, but do not skip the debrief.

Debrief, Scale Up! 2022
14. What happens post-program?

Ok, you just wrapped up another great Masterclass. Now what?

How clear is your plan for next steps? Participant survey? Client debrief? Participant debrief? Project work? Real-life slide decks to review?

Be clear, always, on what happens next.

Your turn

ok, so if you are planning to run Scale Up! sessions, this guide can help you better structure and plan the entire workflow.

Good luck!

Bonus: use as much real-life input as possible. Like here, AMZ going public at 3 years old. Why not you?
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The story of Nexus VC – From Emerging to Institutional Venture Capital: A Technical Roadmap

In our work with emerging managers and Fund-of-fund programs around the world, the ‘journey from emerging to institutional-ready’ is a common challenge for many first time fund managers to grasp. We wrote up the story of Nexus VC to show how to start small, start fast and scale a VC Firm into multiple VC funds and, hopefully, maturing into an institutional ready fund. We teach the same in our Fund Manager! Masterclasses

Second article leading up to the upcoming Dune Venture Days in Dubai.

The journey from emerging venture capital firm to institutional-grade investor represents one of the most complex organizational transformations in private markets. It’s not merely about deploying capital—it’s about building a repeatable system for identifying, winning, and supporting exceptional companies while generating top-quartile returns that justify institutional allocation.

A Dubai Story: The Nexus VC Journey

To understand this transition in practice, consider the story of Nexus VC, a Dubai-based early-stage VC firm that made the leap from emerging to institutional over seven years. Founded in 2016 by Chris Al-Mansour, a former corporate VC investor at a regional conglomerate, Nexus’s journey illustrates both the promise and the pitfalls of this transformation.

Chris started with a conviction: the MENA tech ecosystem was reaching an inflection point, with a new generation of founders building scalable businesses that international investors were missing. His thesis—seed and Series A investments in technology companies solving regional challenges with global potential—had worked in his previous role, but he’d always invested someone else’s capital. Building his own firm would be different.

The Capital Structure Evolution

Stage One: Proof of Concept ($500K–$5M)
Nexus’s Genesis (2016-2017)

You only have a few hours, truly, what are you going to focus on?

Chris began where nearly every VC begins: with a small pool of flexible capital. He raised his first $2M fund from a tight network of supporters. The “fund formation” was a simple LP agreement drafted by a regional law firm ($15,000). The “office” was a co-working space membership at AstroLabs in Dubai. The “deal flow” was his personal network and cold LinkedIn outreach.

The earliest capital represents validation, not optimization. At this stage, VC firms are typically operating under sub-optimal structures:

Fund Structure Considerations:

GP commitment usually 1%–2% of fund size (for first fund, often reduced)

Nexus Fund I – The Capital Stack:
  • Chris’s personal capital: $50,000 (2.5% GP commit, significant for someone in their early 30s)
  • Former boss at the conglomerate: $500,000
  • Three family offices: $300K, $250K, $200K
  • Five HNW individuals: $100K each ($500K total)
  • Two successful entrepreneurs: $150K each ($300K total)

Total: $2.05M fund size

Operational Reality: The GP is typically wearing every hat—deal sourcing, due diligence, portfolio support, fundraising, back office, and investor relations. Technology stack consists of Excel, a basic CRM, and perhaps a simple data room. Legal work is outsourced to the cheapest responsive firm.

Chris was everything. He sourced deals through founder events, conducted due diligence with Excel models and reference calls, negotiated term sheets, sat on boards, supported portfolio companies, managed LP communications, and handled fund accounting. His “tech stack” was Gmail, Excel, a $50/month Airtable subscription for deal tracking, and DocuSign.

The Investment Strategy:

  • Check size: $50K–$150K at seed stage
  • Ownership target: 5%–10%
  • Sector focus: B2B SaaS, fintech, logistics tech
  • Geographic focus: UAE, Egypt, Saudi Arabia
  • Follow-on reserves: ~30% of fund size

First Investments (2017):

Chris moved quickly. By end of 2017, he’d deployed into four companies:

  1. A B2B procurement platform in UAE ($100K)
  2. An Egyptian fintech startup ($75K)
  3. A Saudi logistics SaaS company ($120K)
  4. A Dubai-based HR tech startup ($80K)

Total deployed: $375K across four companies. He’d created a mini-portfolio, but the real work—and uncertainty—was just beginning.

Stage Two: The Inflection Point ($5M–$30M)

Nexus’s Growing Pains (2018-2021)

This is where most emerging VCs fail. The fund is past the friends-and-family stage but hasn’t achieved the scale for institutional attention. This zone represents maximum operational stress per dollar of AUM.

Through 2018-2019, Chris continued deploying Fund I. He made eight more investments, bringing the total to 12 portfolio companies with $1.6M deployed. He reserved $450K for follow-ons and kept $150K for operating expenses (management fees of $41K annually weren’t enough to support operations fully).

Early Portfolio Signals:

  • Two companies failed outright
  • Three were struggling and likely to fail
  • Five were showing decent traction but needed follow-on capital
  • Two were showing exceptional growth—the Egyptian fintech and the Saudi logistics company

The problem: Chris needed to raise Fund II to follow on his winners, but institutional investors wanted to see realized returns from Fund I. He was stuck in the classic emerging VC trap.

The Infrastructure Build-Out:

At approximately $10M under management, economics begin to support institutional infrastructure, though painfully:

After legal and compliance ($50K–$75K), fund administration ($25K–$40K), technology ($15K–$25K), and events/travel ($40K–$60K), there’s barely enough for one salary

The First Hire Decision:

In mid-2019, as Chris began raising Fund II, he faced his first critical decision: hire someone or continue solo. He chose to stay lean through Fund II raise but made a promise to himself—first hire once Fund II closed.

Fund II Raise (2019-2020):

Chris’s pitch for Fund II:

  • Fund I portfolio showing signs of life (paper markups from the two breakout companies)
  • Expanded thesis: earlier stage (more pre-seed/seed), larger fund for follow-on capability
  • Target: $10M
  • Same terms: 2.5%/20% with 8% preferred return
  • GP commit: 2% ($200K, mostly through deferring management fees)

The raise was brutal. Chris pitched 420+ potential investors over 18 months:

  • Existing Fund I LPs: $3.5M (70% re-up rate by capital)
  • New family offices: $2.8M (through extensive networking)
  • Regional institutional investor (sovereign wealth fund’s emerging manager program): $2M (breakthrough allocation after 9-month diligence)
  • Small fund-of-funds focused on emerging managers: $1.5M
  • New HNW individuals: $1.2M

Total: $11M closed by September 2020

The sovereign wealth fund allocation changed everything. Even though $2M was a pilot check for them, it provided institutional validation that Chris could leverage.

Critical Hires and Sequencing:

The hiring sequence matters enormously for VCs. The optimal path is typically:

  1. First hire (~$10M AUM): A principal/associate who can source deals, conduct diligence, and support portfolio companies—compensation $100K–$150K plus carry participation
  2. Second hire (~$25M AUM): Either a portfolio operations person (platform team) or another investing partner, depending on firm strategy
  3. Third hire (~$50M AUM): Whatever role wasn’t filled in step two, or a dedicated CFO/COO

The First Hire (October 2020):

Chris brought on Daniel Kim, a Korean-Canadian investor he’d met through the regional startup ecosystem. Daniel had spent three years at a larger regional VC and had strong networks with founders and co-investors. Compensation: $110,000 base plus 5% of carry on Fund II (vesting over 4 years) plus 8% management company equity.

Daniel became Chris’s investment partner—sourcing deals, conducting diligence, supporting portfolio companies. The two-person investment team could now cover more ground.

Service Provider Maturation:

This stage requires upgrading from startup-friendly vendors to institutionally acceptable ones:

  • Fund Administrator: Moving from DIY accounting to a recognized name (Standish, Otter, Carta for smaller funds; SS&C, Citco, Gen II for larger)—cost increases from near-zero to $30K–$60K annually
  • Auditor: Moving from a local CPA firm to a Big Four or national firm with PE/VC expertise (BDO, Grant Thornton, RSM, or ideally PwC, KPMG, Deloitte, EY)
  • Legal Counsel: Establishing relationships with dedicated VC fund formation attorneys (Debevoise, Ropes & Gray, Goodwin, Latham, but regionally Dechert or DLA Piper)
  • Back-office Infrastructure: Portfolio monitoring systems (Carta, Pulley for cap tables; Visible, 4Degrees, or Affinity for CRM)

With Fund II capital, Chris invested in infrastructure:

  • Hired Otter as fund administrator ($35K annually)
  • Engaged Deloitte for annual fund audit ($50K)
  • Retained Dechert LLP for ongoing fund and deal legal work ($100K annually)
  • Subscribed to Carta for portfolio tracking and Affinity for CRM ($15K annually combined)
  • Moved into a small dedicated office in DIFC (2 desks, $30K annually)

These costs now came from a larger management fee base ($275K annually from Fund II), but margins remained thin.

Performance and Track Record Building:

At this stage, institutional prospects will begin conducting diligence. They expect to see:

  • Realized returns (not just paper markups) demonstrating ability to identify and exit winners
  • Portfolio construction that shows discipline and strategy adherence
  • Value-add capabilities beyond just writing checks
  • Network effects and deal flow quality
  • Co-investor quality as validation

By mid-2021, Chris had meaningful data points:

  • The Egyptian fintech (Fund I) had been acquired by a regional bank—3.8x gross MOIC in 3.5 years
  • The Saudi logistics company (Fund I) raised a $15M Series B at a $60M valuation—Chris’s stake marked at 5.2x
  • Fund I DPI (distributed to paid-in capital): 0.4x (from the fintech exit)
  • Fund I TVPI (total value to paid-in capital): 2.1x on paper
  • Fund II was actively deploying with 8 investments made by mid-2021
Can you map out Nexus VC fund II using the Fund Strategy canvas?

Stage Three: Institutional Threshold ($30M–$100M)

Nexus’s Institutional Breakthrough (2021-2023)

Crossing $30M AUM represents an invisible but critical line for VCs. Institutional allocators begin to take meetings. The fund has enough AUM to suggest market validation but isn’t so large that the opportunity set is constrained.

In Q4 2021, with Fund II partially deployed and Fund I showing real returns, Chris began exploring Fund III. His target: $30M–$40M, which would push Nexus firmly into institutional territory.

The Consultant Ecosystem:

Access to institutional VC capital increasingly runs through gatekeepers:

  • Placement Agents: Third-party fundraisers specializing in emerging managers, typically working for 2%–3% of capital raised with placement fees paid from GP or as an additional LP commitment
  • Fund of Funds: Aggregators like Horsley Bridge, Greenspring, Top Tier, HarbourVest who can write $3M–$10M checks and provide institutional validation
  • Institutional LPs: Pension plans, endowments, foundations, sovereign wealth funds with emerging manager programs
  • Family Offices: Increasingly sophisticated with dedicated alternative investment staff

Chris faced a decision: hire a placement agent or build institutional relationships organically. He chose the latter—partially from conviction that relationship-building was more sustainable, partially because placement agent fees on a $40M fund ($800K–$1.2M) seemed prohibitive.

The Second Hire (January 2022):

Chris brought on Joshua Martinez as VP of Platform & CFO. Joshua had spent five years in VC operations and portfolio support and understood both the investment side and operational requirements. Compensation: $130,000 plus 3% carry on Fund III plus 6% management company equity.

Joshua’s mandate:

  • Build portfolio support capabilities (recruiting, customer intros, follow-on fundraising support)
  • Professionalize fund operations and reporting
  • Support Fund III fundraising with data room preparation and LP reporting

The Third Hire (June 2022):

As Fund III fundraising progressed, Chris hired Malika Khair as Partner focused on Investor Relations and Business Development. Malika had spent eight years at a regional institutional investor evaluating VC funds and had relationships with LPs across the GCC and Europe. Compensation: $150,000 plus 2% carry on Fund III plus 5% management company equity.

Her immediate impact was professionalizing LP communications and opening doors to institutional allocators who wouldn’t have responded to cold outreach.

Due Diligence Intensity:

Institutional VC due diligence is comprehensive and multi-layered:

  • Strategy assessment: Is the thesis differentiated? Is it sustainable? What’s the competitive moat?
  • Team evaluation: Track record of individuals, team dynamics, reference checks with founders and co-investors
  • Performance analysis: Portfolio construction, deal flow quality, value-add capabilities, follow-on discipline
  • Operations review: Fund administration, compliance, portfolio tracking, reporting capabilities
  • Reference calls: Portfolio company founders, co-investors, service providers, other LPs
  • Scenario analysis: How does fund perform across different outcome scenarios? What’s the path to top quartile?

In Q2 2022, Nexus underwent its first institutional operational due diligence. A $3B European pension fund with a dedicated emerging manager allocation sent a two-person team to Dubai for a week. They:

  • Interviewed the entire team separately
  • Called 10 portfolio company founders for references
  • Spoke with 5 co-investors about Nexus’s reputation
  • Reviewed all fund documents, side letters, and carried interest calculations
  • Analyzed deal flow metrics, pass rates, and investment decision-making
  • Examined portfolio monitoring and value-add frameworks
  • Assessed fund economics and alignment of interests

The process was exhaustive. Three months later, in August 2022, the pension fund committed €3M (~$3M) to Fund III.

Fund III Fundraising (2022-2023):

Chris’s pitch for Fund III evolved:

  • Fund I: 2.8x TVPI with 0.6x DPI (two exits realized, three more in process)
  • Fund II: 1.6x TVPI early, but portfolio showing strong signals
  • Proven sourcing in underinvested market
  • Platform capabilities to support companies through scale
  • Target: $40M with potential to upsize to $50M
  • Terms: 2%/20% with 8% preferred, improving to institutional standards (quarterly reporting, LPAC formation, key person provisions)

The fundraising took 18 months:

  • Existing LPs (Funds I & II): $12M (strong re-up rate)
  • European pension fund: $3M (breakthrough institutional LP)
  • Two regional sovereign wealth fund programs: $8M combined (both emerging manager allocations)
  • Established fund-of-funds (Top Tier Capital): $5M (validation from recognized name)
  • US-based endowment: $4M (first North American institutional LP)
  • Family offices: $6M (increasingly sophisticated allocators)
  • New HNW individuals: $2M

Total: $40M final close in June 2023

The fund-of-funds and US endowment commitments were game-changers. Both required extensive diligence, but their presence in the cap table signaled to other institutions that Nexus had arrived.

Terms Standardization:

To attract institutional capital, fund terms must align with market standards:

  • Management fees: 2% on committed capital during investment period, 1.5%–2% on invested capital post-investment period (some funds use NAV basis)
  • Carry: 20% remains standard, with 8% preferred return (some institutions push for 10%)
  • GP commit: 2%–3% of fund size (increasingly enforced)
  • Key person provisions: if Chris or Daniel left, investment period suspended
  • LPAC formation: 3–5 seats representing major LPs
  • Reporting: quarterly detailed reports with portfolio company updates and fund performance
  • No-fault divorce provisions: LPs can remove GP under certain circumstances
  • Clawback provisions: ensuring carry is only paid on realized profits

Fund III incorporated all institutional standard terms. Chris and Daniel committed $1.2M combined (3% GP commit), primarily through management fee deferrals and personal capital.

The Destination: Institutional VC Firm ($50M+)

Capital Deployment at Scale

Nexus’s Institutional Operations (2023-Present)

With $40M in Fund III, Nexus operated as an institutional VC firm. The transformation was complete in structure, if not yet in scale.

Deployment Strategy:

  • Check sizes increased: $200K–$500K seed, up to $1M+ Series A
  • Ownership targets: 7%–15% at initial investment
  • Portfolio construction: 20–25 companies in Fund III
  • Reserve ratio: 40% for follow-ons (recognizing winners early and supporting them aggressively)
  • Geographic expansion: maintaining MENA focus but open to global opportunities for exceptional founders

The Team at Scale:

At institutional scale, VC teams must professionalize across all functions:

Investment Team:

  • Managing Partners drive strategy and make final investment decisions
  • Partners/Principals source deals, lead diligence, take board seats
  • Associates/Analysts support diligence, portfolio monitoring, market research
  • Venture Partners/Advisors provide domain expertise and deal flow

By 2024, Nexus’s investment team:

  • Chris (Managing Partner) – focused on strategy, key deals, Fund IV planning
  • Daniel (Partner) – actively sourcing and leading investments, 4 board seats
  • Two Principals hired in 2023 ($140K each plus carry participation) – deal flow and execution
  • Two Associates ($90K each) – supporting diligence and portfolio companies

Platform/Operations Team:

  • Platform professionals supporting portfolio companies (recruiting, sales, fundraising)
  • CFO/COO managing fund operations, compliance, and administration
  • IR/capital formation professionals managing LP relationships and fundraising

Joshua’s platform team:

  • Portfolio talent specialist ($95K) – recruiting support for portfolio companies
  • Platform associate ($75K) – coordinating portfolio events and resources
  • Joshua (VP Platform/CFO) – overall operations and portfolio support

Malika’s IR team:

  • IR associate ($85K) – managing quarterly reporting and LP communications
  • Malika (Partner, IR & Business Development) – institutional relationships and Fund IV preparation

Total team: 11 professionals (6 investment, 5 platform/ops)

Operational Infrastructure at Institutional Scale

Technology Stack:

  • Fund administration platforms (Carta, Allocate, Juniper Square)
  • Portfolio monitoring systems (Visible, Chronograph, Kushim)
  • CRM and deal flow management (Affinity, 4Degrees, Sourcewhale)
  • Data rooms and document management (DocSend, Dropbox, DealRoom)
  • Communication and collaboration tools (Slack, Notion, Airtable)
  • Analytics and benchmarking (Cambridge Associates, PitchBook, Preqin)

Nexus’s tech stack in 2024:

  • Carta for fund administration and portfolio cap table management ($60K annually)
  • Visible for portfolio monitoring and LP reporting ($25K annually)
  • Affinity for CRM and relationship management ($40K annually)
  • PitchBook for market intelligence and benchmarking ($35K annually)
  • Various other tools ($20K annually)

Total technology spend: $180K annually (up from $15K in Fund I days)

Governance and Oversight:

  • LPAC formation with 3–5 institutional LP representatives
  • Annual LP meetings (typically in-person at major LP gatherings)
  • Quarterly reporting with detailed portfolio updates and fund performance
  • Independent valuations for portfolio companies (409A or fairness opinions)
  • Comprehensive compliance program with annual testing
  • Advisory boards with domain experts and successful entrepreneurs

Fund III LPAC (formed Q4 2023):

  • European pension fund representative
  • Top Tier Capital representative
  • Sovereign wealth fund representative (rotating seat)
  • US endowment representative
  • Independent member (successful serial entrepreneur and LP)

The LPAC met quarterly to review:

  • Fund strategy and any proposed changes
  • New investments above certain size thresholds
  • Portfolio company challenges or restructurings
  • Key person issues or organizational changes
  • Follow-on fund planning and terms

Insurance and Risk Management:

  • D&O insurance: $10M coverage
  • E&O insurance: $5M coverage
  • Cybersecurity insurance: $3M coverage
  • Fidelity bond: $2M coverage
  • Key person insurance on Chris

Fund Lifecycle and Returns Management

Successful institutional VC firms manage multiple vintage years simultaneously:

  • Active deployment from newest fund
  • Active portfolio management across all funds
  • Exit planning and DPI generation for older funds
  • Follow-on decisions across fund vintages
  • Fund IV fundraising while Fund III deploys

Nexus Fund Portfolio (2024 Snapshot):

Fund I ($2M, 2017 vintage):

  • 12 investments, 10 still active (2 failed completely)
  • 3 exits realized (fintech acquisition, two acqui-hires)
  • 2 strong companies likely to exit at meaningful multiples (logistics unicorn, B2B SaaS)
  • Current metrics: 3.2x TVPI, 1.1x DPI (distributions improving as exits materialize)
  • Top quartile for vintage and geography

Fund II ($11M, 2020 vintage):

  • 18 investments, 16 active (2 failures)
  • 1 exit realized (modest return)
  • 5 companies showing exceptional growth, raised follow-on rounds at significant markups
  • Current metrics: 2.4x TVPI, 0.3x DPI
  • Tracking toward top quartile

Fund III ($40M, 2023 vintage):

  • 12 investments deployed (~$8M), investment period ongoing
  • Early to assess performance, but initial companies showing traction
  • Deal flow significantly improved with institutional backing

Exit Strategy and DPI Generation:

Institutional LPs increasingly focus on realized returns (DPI), not just paper markups (TVPI):

  • Exit pathways: M&A (most common in emerging markets), secondary sales, IPOs (rare)
  • Active management of exit timing—knowing when to sell vs. hold for next round
  • Secondary market solutions for liquidity before traditional exits
  • Engaging with investment banks and corporate development teams early

Chris and Daniel actively worked exit opportunities:

  • The Fund I logistics company had become a unicorn ($1.2B valuation in 2023). Chris faced a decision: sell secondary stake (5x–6x) or hold for potential IPO (10x+ but uncertain timing). After LPAC consultation, he partially exited (50% of position) in a structured secondary, generating meaningful DPI for Fund I while retaining upside.
  • Two Fund II companies received acquisition interest from larger strategics. Chris negotiated exits at 4x and 3.5x MOIC respectively.

By 2024, Fund I was approaching final distributions with strong returns. This performance became critical for Fund IV discussions.

The Critical Success Factors for VC Firms

Performance and Track Record

Institutional VC investors evaluate firms on multiple dimensions:

  • Gross and net returns: Top quartile benchmarking (need 3x+ net MOIC for top quartile in most vintage years)
  • DPI generation: Actual cash returned to LPs, not just paper gains
  • Investment discipline: Pass rate, portfolio construction, follow-on management
  • Value creation: Evidence of value-add beyond capital
  • Deal access: Quality of deal flow and competitive win rate
  • Portfolio outcomes distribution: How concentrated are returns? (VC follows power law)

Nexus’s track record (2024):

  • Fund I: 3.2x TVPI, 1.1x DPI (top quartile for vintage)
  • Fund II: 2.4x TVPI, 0.3x DPI (tracking top quartile)
  • Deal flow: 800+ companies reviewed in 2023, 12 investments (1.5% conversion)
  • Competitive win rate: 75% of term sheets accepted (high for region)
  • Portfolio support: 85% of portfolio companies reported Nexus as helpful or very helpful in annual survey
  • Follow-on signaling: 90% of Nexus portfolio companies that raised follow-on rounds received additional Nexus capital

Team Quality and Stability

LPs invest in teams, not just strategies:

  • Track record of individuals: What have they built or backed before?
  • Team dynamics: How do they work together? Is there alignment?
  • Retention: Has there been turnover? Are people locked in with golden handcuffs?
  • Succession planning: What happens if the founder leaves?
  • Diversity of thought: Different perspectives and backgrounds strengthen decision-making

Nexus’s team stability:

  • Zero turnover in core team (Chris, Daniel, Joshua, Malika) over 6 years
  • Management company equity: Chris 65%, Daniel 12%, Joshua 8%, Malika 7%, option pool 8%
  • Carry allocation clearly defined across funds with vesting structures
  • Decision-making process documented: Chris and Daniel both had veto rights on investments, but decisions made by consensus
  • Succession: Daniel capable of leading firm if Chris unavailable

Deal Flow and Market Position

Sustainable deal flow is the lifeblood of VC:

  • Founder networks: Do great founders come to you first?
  • Co-investor relationships: Do top firms want to co-invest with you?
  • Brand in market: Are you known for specific expertise or value-add?
  • Geographic or sector moats: Do you have differentiated access?
  • Platform capabilities: Can you help companies beyond just capital?

Nexus’s market position (2024):

  • Recognized brand in MENA tech ecosystem—founders sought Nexus out
  • Strong co-investor relationships with international tier-1 VCs (Sequoia, Accel, Index, others) who valued regional presence
  • Domain expertise in fintech, logistics tech, B2B SaaS recognized by founders
  • Platform capabilities (recruiting, sales intros, fundraising support) differentiated from pure-play capital providers
  • Chris and Daniel both regular speakers at regional startup events, active on social media, published thought leadership

Alignment and Economics

LPs scrutinize fund economics rigorously:

  • GP commit: Is GP capital at risk alongside LPs?
  • Management fee structure: Are fees appropriate for fund size and strategy?
  • Carry structure: Is carry aligned with LP returns (hurdles, catch-up provisions)?
  • Conflicts of interest: Side vehicles, SPVs, management company conflicts?
  • Transparency: Are fund economics clearly communicated?

Nexus’s alignment:

  • GP commit: 3% across all funds (Chris and Daniel’s personal capital at risk)
  • Management fees: 2% committed capital during investment period, reducing to 1.75% on invested capital (lower than many peers)
  • Carry: 20% with 8% preferred return, subject to clawback
  • No side vehicles or management company conflicts
  • Full transparency on fees and expenses in quarterly reports

The Institutional Mindset Shift

The transition from emerging to institutional VC isn’t just operational—it’s philosophical. Emerging VCs optimize for access and survival. Institutional VCs optimize for repeatable process, portfolio construction, and sustainable returns.

Chris’s Reflection (2026):

In a conversation with a prospective emerging VC seeking advice, Chris reflected on the journey:

“The hardest lesson was learning that being a good investor doesn’t make you a good fund manager. They’re different skills. In the early days, I thought if I just picked good companies, everything else would work out. But institutional investors don’t just want good picks—they want evidence of a repeatable process, proof that you can do it again and again.

That meant formalizing everything. Our investment memos went from 3-page Word docs to 25-page structured analyses. Our portfolio monitoring went from ‘check in with founders’ to quarterly board meetings with KPI tracking. Our fundraising went from begging for meetings to LPs calling us.

The other big shift was time horizon. Emerging VCs think fund-to-fund—’I need returns from Fund I to raise Fund II.’ Institutional VCs think in decades—’How do we build a multi-generational firm?’ That changes how you think about team building, portfolio construction, and market positioning.

And honestly? The economics compress. Fund I, when it was just me, I probably cleared 70% margins on management fees after minimal costs. Fund III, with a team of 11 and real infrastructure, we’re running at 35%–40% margins. But it’s a bigger base, the business is sustainable, and we’re not dependent on me not getting hit by a bus.

The valley between $5M and $30M under management is where most VCs die. You’re too big to run lean, too small to afford infrastructure. You need returns from your early funds, but those take 7–10 years to materialize. It’s brutal. We survived because we stayed disciplined, hired intentionally, and always thought about what institutional LPs would require—even when we didn’t have institutional LPs yet.”

This means:

  • Building repeatable processes over gut-feel investing
  • Accepting that team building and operational excellence matter as much as deal picking
  • Recognizing that LP management is a continuous relationship, not transactional fundraising
  • Understanding that reputation in VC compounds exponentially—one ethical lapse or major failure can close doors permanently

Conclusion: Building for Permanence

The emerging VCs who successfully transition to institutional status share common traits: they treat venture capital as a business, not just a series of bets. They invest in team and infrastructure before they absolutely need it. They build relationships with LPs as true partnerships, not just capital sources. And they recognize that institutional VC capital is patient and sticky—once earned, it provides a foundation for building a multi-decade franchise.

Nexus’s Future (2026 Outlook)

As of January 2026, Nexus VC manages $53M across three active funds (Fund I largely distributed, Fund II partially realized, Fund III actively deploying). The firm is preparing to launch Fund IV with a target of $75M–$100M, which would firmly establish Nexus as a institutional-scale regional VC.

Chris, Daniel, Joshua, and Malika have built something that transcends any individual. The firm has institutional LPs who view Nexus as a core emerging markets allocation. The team has depth and succession planning. The deal flow is sustainable and differentiated. The portfolio is generating real returns, not just paper markups.

The journey from Chris’s co-working desk to a $100M institutional VC took nine years (including Fund IV raise), three key hires, hundreds of rejected pitches, and a willingness to professionalize every aspect of the business. It’s a journey hundreds of emerging VCs attempt every year. But as Chris learned, getting from $2M to institutional scale isn’t primarily about picking winners—every VC believes they can do that. It’s about building an organization that institutional fiduciaries trust with their capital.

The hard part, Chris often reflects, wasn’t raising the first fund—friends and family believed in him personally. And it wasn’t deploying capital—there were always companies to invest in. The hard part was the years between Fund I and Fund III, when he had to build real returns, hire a team, professionalize operations, and convince skeptical institutional LPs that a regional, emerging VC deserved their attention.

But for those who survive the valley, who build the track record, who invest in team and process, who treat LPs as true partners—there’s a path from emerging to institutional. It’s not easy, it’s not quick, but it’s possible.

And on quiet mornings, when Chris arrives at the Nexus office before the team, he sometimes thinks back to those early days in the co-working space, cold-emailing founders and begging for investor meetings, wondering if he could really build a firm. The answer, it turned out, was yes—but only by building something bigger than himself, something that could endure beyond any single fund or investment cycle.

The emerging VCs who make it don’t just pick good companies. They build great firms. And in venture capital, the firm is the ultimate product.

The story of Nexus VC is fictional, but based on 100’s of conversations with emerging managers across accelerators, masterclasses and GP coaching sessions.

About Dune Venture Days: Welcome to the first edition of DUNE Venture Days: a complimentary, invite-only venture capital gathering designed for a curated group of VCs, startup investors, and ecosystem leaders.

DUNE will take place in partnership with Dubai CommerCity and alongside the WORLDEF Dubai 2026 Conference.

DUNE is 100% complimentary. It is simply about giving back to the VC ecosystem — a moment to strengthen existing relationships, build new ones, and bring together people we genuinely enjoy exchanging ideas with. Apply to join at Dune Venture Days.

Want to learn more? Explore Strategy Tools Fund Manager Masterclasses and GP programs.

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Top 10 Strategy Sims of 2025

In 2025, 1.981 people across 87 sessions got to experience Strategy Sims in action. From Impact investing in the Pacific, corporate transformation in Europe, VC fund management in North America, strategic leadership in South East Asia or high-growth scale up leadership across MENA; Strategy Sims keep expanding.

This year’s top 10 ranking takes us to places like Switzerland, Nigeria, Fiji, Canada (twice), the United Arab Emirates, Egypt, the United Kingdom, Mauritius and Saudi Arabia; here are our top 2025 Masterclasses – all built around the Strategy sims.

1. Fund Manager!, IMD (Switzerland)

WHO: IMD (Business School)

WHERE: Lausanne, Switzerland

DURATION: 2 days (Twice, one in May, one in September)

WHY THE SIM?

Now in its third year, the collaboration with IMD is perfectly mission-aligned with our goal of taking venture asset education in Europe to the next level. We are honored and privileged to be working with faculty lead Jim Pulcrano, pouring all his energy and connections into building this program into a force for good in the European VC landscape.

The reason IMD’s Fund Manager! Tops this ranking for the second year in a row is simple. The quality of the participants and the quality of work we witness in the program easily exceed any other group, anywhere (sorry, everyone else). This outlier performance is likely due to a couple of reasons. Number one, the top-notch quality of participants can really be felt from the moment we step into the classroom. These are high-processing power participants, ready to work. For this year, we had multiple high-caliber investment professionals, including Germany, Switzerland, Italy, Oman and Saudi Arabia. The pure quality of participants make this program stand out in every aspect.

Second, people lean in, work hard, prepare well. It is clear that people take the time, focus, concentrate and show up truly prepared and ready to work.

Third, participants truly engage with the content, exercises, challenges and presentations. They put in the work, overnight, from day one to day two. People are competitive and that truly helps team shift gears going into day two.

OUTCOME:

Clearly positioned as an educational experience, the four day Venture Asset Management Program has two core elements. Days 1 & 2; classroom learning through guest speakers, lectures and case studies. Days 3 & 4, hands-on experiential learning, where participants form teams to lead their own investments firms over a 15-year journey, for most teams culminating in running not one, but two investment funds.

What teams truly take away; navigating the full 15-year fund journey, from start to net DPI.

“The best learning experience—budding unicorns all over! An actual magic learning process.” — Anna Ziajka

“Just wow… So much of what I’ve been picking up mostly piecemeal over the years really began to crystallize. My VC excitement is validated.” — Ashton Songer Ferguson

“In just 48 hours, we went from barely knowing what pre-money meant to negotiating term sheets and syndicating deals. It’s one thing to read about VC in books, but you only ‘get it’ under pressure.” — John Nicholas

WHY IT MADE THE #1 SPOT ON THE TOP 10 LIST:

Our shared passion with IMD runs deep. We are in this together, to educate venture capital leaders across the ecosystem. From emerging limited partners, family offices, future fund managers, pension funds, sovereign wealth funds, newly formed CVC teams; we have met them all at IMD’s Venture Asset Management Programme. With 55+ Fund Manager! Programs completed globally, the IMD experience stands in a category of its own – for the second year in a row. Want to learn more? Join an upcoming Venture Asset Management Program in May or September. Read more about VAM here.

FULL CASE STUDY: Taking Venture Asset Education in Europe to the Next Level

DELIVERY TEAM: Chris Rangen, Scott B. Newton

Congrats to the entire Sep 2025 cohort!
Fund Manager! changes any classroom into a competitive pit of future fund managers and Limited partners

2. Pacific Island Fund Manager (Fiji)

WHO: Matanataki (General partner)

WHERE: Fiji

DURATION: 3 days (9 months, really)

WHY THE SIM?

“Chris, we want to make an impact version of Fund Manager!, for Fiji” “Of course”, I said, the first time Jodi, GP and founder of Matanataki brought this up in Singapore in November 2023. “No problem”

Little, of course, I knew that this easy-going conversion would turn into the hardest, most complex project of all of 2025 – and ultimately culminate in a powerful ecosystem engagement workshop on Fiji in August the same year.

Working with Jodi Smith, Andrew Irvin and the design team to bring the Pacific Islands Fund Manager! from  early idea to live delivery was a genuine highlight of the year – and stands as one of our most complex projects – possibly ever.

Eight of 2.400 unique pieces for Pacific Islands Fund Manager!

OUTCOME:

The research took 5-6 months. Deep diving into the shifting world of impact investing. Not just the label of impact investing. The real world where most of the traditional instruments are not available. Where follow-on financing rounds do not exist. Where the traditional metrics for VC and PE are not just skewed but completely altered. Where the traditional PE playbook does not apply. Where impact frameworks have moved from complicated to outright impossible for most of us to follow (Shoutout to Aunnie Patton Power for being a grounded voice of solid research in this space, and Jen Braswell for lending a life-time of experience to our emergent research). As winter turned to spring, our work turned into content development and writing.

We stopped counting at 2.400 new, unique content cards. We piloted. We iterated. Slowly, the content was starting to click. The fund financial model got built out; our most complex yet. (imagine you are running a full investment portfolio with both equity investments, cash flow and earnings and impact investment data. If you know, you know). Spring turned to summer, and the Fiji ecosystem engagement program was drawing closer. Internal tests and retests. Internal Train-the-trainers for the project team.

We landed in Nandi, Fiji around 6 am. Ready to support Jodi and the full GP Team at Matanataki on their ecosystem engagement. LPs were flying in. Key people and partners, politicians, portfolio CEOs, former EIB and IFC fund-of-fund executives flew in. The actual Pacific Islands Fund Manager! Workshop took place in Suva, overlooking the bay.

Five teams, five to eight people per team. Each team setting up their own $50M ocean impact fund, aiming to deploy capital and scale 10-25 impact investments across the Pacific. Perfectly modelled out to reflect the real-life challenges of leading a multi-decade investment platform in Fiji. Futaspak Pacific investment fund (Future Spark), Mana Pasifika, Wan Solwara, Pacific Ocean Resilience Fund and Loloma; all competed and collaborating, making a total of 50 investments, deploying $233.565.000, while returning back $475.239.939 to LPs. Mana Pasifika outperformed its peers with a 163,5 Impact Score, easily beating the average of 131,8 impact score. Financial top performance went to Pacific Ocean Resilience Fund, who turned a $16M equity investment in BlueSeaScape into a $230M cash-on-cash exit, ultimately returning 7.1X net DPI back to its LPs

More importantly, the ecosystem engagement brought together 30+ key ecosystem participants across the Pacific. From General Partners at Matanataki, Limited partners with a clear ocean impact focus, Fiji-based pipeline and portfolio CEOs, political connections, ecosystem supporters, village chiefs, island elders and investment professionals supporting Matanataki. The experience left a deep, lasting impression of both the complexities of running a Pacific island ocean impact fund and the importance of working with the ecosystem to make it happen.

WHY IT MADE THE TOP 10 LIST:

We probably spent north of 900 hours to develop Pacific Islands Fund Manager! Bringing it to Fiji to run with a truly eclectic group of participants from across the Pacific islands investment landscape was a unique experience. At the same time, even the most experienced team co-facilitators came back, “this is too hard to run”, reflecting the genuine challenges of running a multi-strategy, impact-first investment fund in the Pacific.

That’s how we designed it. To be hard. Because it is. Pacific Islands Fund Manager! Aims to truly showcase the details, the complexities, the technical requirements to run a 20-company investment portfolio with a mix of equity investment (but without any traditional follow-on rounds for equity valuation mark-ups), debt investment (but also requiring the investors to be deeply familiar with cash flows and ability to service debt), and recognizing that no traditional exit paths exists, to revenue-based earn-out models, community-based buyouts and self-liquidating exit routes need to become the default across the portfolio; while also balancing this with the PhD-technical-skill level of truly tracking impact metrics in line with(overly complicated) LP reporting requirements. We’ve looked globally. Nothing quite like this exists anywhere. This is why Fiji’s Pacific Islands Fund Manager! Made the top 10 list of 2025. But, it’s hard.

DELIVERY TEAM: Chris Rangen, Jen Braswell

Post-session, co-facilitator Jen wrapping up. Fiji, we’ll be back

3. Scale Up MENA X DFDF (UAE)

WHO: Dubai Future District Fund (Fund-of-funds)

WHERE: Dubai,UAE

DURATION: 2 days

WHY THE SIM?

Our partnership with DFDF runs back several years. When we started the development of Scale Up MENA!, DFDF was an obvious partner to work with to launch Scale Up MENA! In Dubai.

Our thesis: Scale Up MENA! Will perfectly support founders as they raise their Series A and need to grow into venture- and growth stage territory. Working with Tiffany Bain, Nader AlBastaki and Mahmoud Ward and 20+ late-stage DFDF portfolio founders, we got the thesis proven. In November 2025 we hosted the first ever Scale Up MENA! Masterclass, aimed exclusively at a small, hand-picked group of portfolio founders and a few investment professionals from across the MENA ecosystem.

OUTCOME:

“Just wrapped up an incredible two-day workshop on Scaling and Exiting for Founders, hosted by Dubai Future District Fund who I’m deeply thankful for the invitation. If only I had attended something like this 20 years ago during my first venture… In just 16 hours, we covered what felt like a year’s worth of founder lessons thanks to Christian Rangen of Strategy Tools and the team”, said, Fahmi Al-Shawwa, Founder & CEO of Immensa upon completing the program.

“In just two days we take people through a full 8-10 year journey to exit, the founder’s journey”, said Scott B. Newton, aptly summarizing the program.

So, what are people equipped with upon completing Sclae Up MENA! ? – Think long-term growth strategy – Study term sheets, work hard to get five+ term sheets for each round – Understand investor outcomes, understand the VC business model and how you fit in – Work strategically on exits, start earlier than you think – Keep your cap table clean and updated. A messy cap table makes secondaries and exits impossible – And maybe most importantly, scaling up starts with a mindset shifts and expands form there

FULL CASE STUDY: Scaling to exit

WHY IT MADE THE TOP 10 LIST:

“We are picking our very best founders”, said the team at DFDF. And they did. The founder participants we met were deeply experienced. Successfully built and exited in the region already. Negotiating the $160M term sheet with Blackrock. Raising Series A’s across markets. Deep experience in capital markets, having work for many of the leading investment banks in the region. They were, if you will, ‘supercharged founders’.

Taking this advanced group of founders and investors through Scale Up MENA!, going from idea to exit in just two days was a sprint – but they truly aced it. It proves that Scale Up MENA! Is well suited, to not only support early-stage founders (seed) but also push and support venture- and growth stage founders as they scale.

“Possibly the most unique training I have taken part in. The highs and lows of being a start up founder squeezed into two days.” – Michael Hunter, CEO & Co-founder, Holo

“The best program so far I have attended and at what speed. Precisely designed, immaculately delivered” – Avneesh Prakash, CEO, CAMB.AI

DELIVERY TEAM: Chris Rangen, Scott B. Newton, Sanjana Raheja, Alain Traboulsy

Pitching a VC outcome analysis, not a bad way to start day two

4. Transform! Hult Ashridge (UK)

WHO: Hult Ashridge Business School, in partnership with a leading European industrials company

WHERE: Ashridge campus, London

DURATION: 2 days

WHY THE SIM?

Transform! Has been a backbone of many executive education programs for the past six years. One of the most active business schools, with a long track record of experiential learning, has been Hult Ashridge and notably their global corporate and executive education teams.

When one of Europe’s leading industrial companies partnered with Ashridge to design a high-impact, future leader program, Transform! Was a strong addition to bring into the teaching format.

OUTCOME:

Transform! Is centered around four key domains; Team performance, Strategy & transformation, Capital markets & governance and performance. Within each of these, numerous topics are explored in depth. “How well did we gather, share, process information, allowing us to solve complex problems?”, “How well did we use different capital and finance options to gain an advantage on our peers?”, “How well did we interact, communicate, and respond to capital markets and various shareholder and stakeholder groups?” and “How well did we develop a winning culture, game plan, and mindset, to both overperform, outperform,and outcompete the other teams”

For the future leaders at the Industrial company, working at the incredible Ashridge campus, Transform! Served as a strong reminder that leadership is far more than just managing your team and hitting your P&L’s. To truly lead a transformational company, a very different playbook is needed.

WHY IT MADE THE TOP 10 LIST:

“Over a year we might run 25-30 Transform! Sessions globally, but this group was spectacular. Hungry, ambitious and clearly pushing themselves to transform faster – both individually and as teams”.

DELIVERY TEAM:  Chris Rangen

Deal structuring, mergers and investments at rapid pace

5. Scale Up MENA! Falak Startups (Egypt)

WHO: Falak Startups, in partnership with EBRD

WHERE: Cairo, Egypt

DURATION: 3 days

WHY THE SIM?

It all started in Cairo. A bit more than a year ago. We saw the effects of having more localized content. Of having more local market realities. Of having content and cases people could relate to. This insight, in November 2024, led us to develop Scale Up MENA! Now, a year later, we were back in Cairo, back with our friends at Falak Startups. In collaboration with EBRD Star Venture, Falak hosted nearly 30 scale up founders, investors and ecosystem builders.

Scale Up MENA!, if you were, was coming home. Over three days we had five teams compete – and collaborate – to build breakout winner companies coming out of MENA ecosystem.

OUTCOME:

The scale Up MENA! Masterclass equips founders and investors with five key things.

1. A chance to experience the Founder’s Journey, from idea to exit

2. Navigate 500+ term sheets and financing instruments

3. Crack the code of revenue velocity and market expansion

4. Learn a series of visual strategy canvases

5. Handle a cap table from first founders’ shares through an exit transaction

WHY IT MADE THE TOP 10 LIST:

What made this session unique was two-fold. One, being back in Cairo with the team that helped kick-start Scale Up MENA! to begin with. Two, seeing founders really engage – and compete – with the ultra-localized content, deal terms, investor term sheets, investment bankers and Superinvestors from across the region. But, most importantly, this was yet another fast-paced, high-energy, Scale Up! Masterclass, proving to us as facilitators just how much content, learning and advanced level materials we can pack into just three days.

Full case study: Scaling up in the rising Egyptian ecosystem

DELIVERY TEAM:  Chris Rangen, Rumbi Makanga, Mohammed al Rasbi

Scale Up MENA! Drone view.

6. Fund Manager! BKR Capital (Canada)

WHO: BKR Capital

WHERE: Toronto, Canada

DURATION: 3 days

WHY THE SIM?

BKR Capital’s mission is to bridge the funding gap for Black-led companies in the technology sector, fostering an inclusive ecosystem by making capital accessible to visionary founders, driving wealth creation for the Black community, and training the next generation of Black investment professionals. They provide early, transformational investments in disruptive tech startups, aiming to create systemic change and normalize diversity in venture capital. BKR Capital has partnered with Strategy tools to work directly with their talented investment professionals including the Fund Manager simulation which was held in person in Toronto Canada in 2025 (and again in 2026)

OUTCOME:

The GPs and ecosystem partners that participated in the simulation were highly positive in their feedback, and noted both how realistic the simulation was, and how practical the tools are to diagnose and start improving performance from today forward.

The talented GPs demonstrated how they can improve their Strategy, their pitch, their approach, and importantly teamwork to deliver at even higher levels of impact in the future.

WHY IT MADE THE TOP 10 LIST:

While we delivered Fund Manager to global groups in 2025, this particular SIM session stood out for the advanced levels of discussion, the intense preparation by the participants, and their application immediately in to their funds and teams.

DELIVERY TEAM: Scott B. Newton

BKR Catalyst – Launch Readiness Program, Feb 2025

7. Scale Up! Madica Ventures (Nigeria)

WHO: Madica Ventures

WHERE: Lagos, Nigeria

DURATION: 2 days (with 2 preparatory webinars the week before)

WHY THE SIM?

Madica wanted to move beyond investor theory and slide decks to give pre-seed founders a realistic, hands-on understanding of fundraising, investor dynamics, and long-term capital strategy. While most founders had already raised using SAFEs or CLAs, many lacked clarity on how these instruments convert, how dilution compounds over time, and how to plan multiple rounds ahead while balancing growth, cash flow, and investor expectations.

The goal was to build real decision-making muscle by letting founders experience the consequences of their choices in a simulated but high-pressure environment.

“Madica wanted practical, hands-on training where the founders could immediately apply the learnings in their own startups.” – Vishal Shah

OUTCOME:

Fifteen founders experienced the full founder journey—from idea through multiple funding rounds to exit—inside the Scale Up! simulation. Working in teams as CEO, CFO, and CRO, participants structured and closed funding rounds, selected and traded investors, responded to board demands, explored acquisitions, and executed high-stakes exits—learning firsthand how early decisions compound over time.

By the end of the program, founders could confidently map long-term capital strategies, rebalance cap tables, understand SAFE and CLA conversions, and align growth plans with investor expectations.

“…I learned a great deal about the fundraising process and the connection between financial metrics and company valuation.” — Ahmed Chaari

“This simulation was an amazing opportunity to learn from realistic scenarios… and live through it up until the exit scenario”.- Yousef Elsamaa, Co-Founder & CEO, Daleela

WHY IT MADE THE TOP 10 LIST:

  • Tackled one of the hardest challenges for African startups: scaling beyond pre-seed with capital discipline
  • Transformed complex VC mechanics into hands-on, high-pressure decision-making
  • Compressed years of fundraising, investor alignment, and exit planning into two intense days
  • Delivered immediately transferable skills in capital planning, dilution management, and investor strategy

“I was strategizing how to build revenue and growth against how we fund that growth. It was really fun, but it was also very thought-provoking.” — Chidalu Onyeso, Founder & CEO, Earthbond

FULL CASE STUDY: Helping Madica’s pre-seed startups bridge the scaling chasm

DELIVERY TEAM:  Vishal Shah, Rumbi Makanga

Scale Up! mid-session, under the watchful eyes of Rumbi

8. Transform! IE Business School (Saudi Arabia)

WHO: IE Business School, partnering with one of the largest food companies in MENA

WHERE: Riyadh, Saudi Arabia

DURATION: 3 days

WHY THE SIM?

Transform! Has served us well in global business schools including US, Spain, UK, Norway; but would it also hold up as well immersed in the cultural leadership nuances of Saudi Arabia? Would one of Saudi Arabia’s largest companies find Transform! And leading transformation at scale to be both relevant, applicable and suitable? The short answer: yes, absolutely.

The session had clear cultural and content differences, based on conversations and executive leadership challenges that came up. It was not the same as running a five-day Executive Program in the United States, but nor did we expect it.

Anchored in the realities and cultural distinctions of leading transformation in the Kingdom, Transform! Overshot its expectations and formed the backbone of “the best session of our entire leadership program”, according to one of our senior executive participants.

OUTCOME:

The number one outcome was a substantially increased clarity on ‘strategic leadership’. Recognizing that leadership goes far, far beyond ‘managing people’, and in this day and age, covers core skills like strategy, finance, M&A, innovation, hostile take-over, senior level negotiation, financial engineering, a balanced portfolio of core, growth and explore business models providing stable cash flow today and strong business opportunities for tomorrow.

“This was the most insightful leadership development I’ve ever been a part of”, said one senior executive, echoing the group’s take-away; this was strategic leadership development, with profound impact on both team and individual learning.

WHY IT MADE THE TOP 10 LIST:

This was Transform!’s first appearance in Saudi Arabia – and went exceptionally well. This year we have run a record number of corporate education programs, all using Transform!, all seeing customization of content to capture the nuances of each individual client. From food and dairy in MENA, financial technology in Europe, manufacturing in the Americas and Europe to global tech; Transform! Proves an excellent fit for developing strategic leaders at all levels – and that’s why we see Transform! KSA on the list for 2025.

DELIVERY TEAM: Chris Rangen

Facilitator view, coffee break

9. Supercluster! ISED – Innovation, Science and Economic Development Canada (Canada)

WHO: ISED

WHERE: Ottawa, Canada

DURATION: 0,5 day

WHY THE SIM?

Supercluster! was first developed to provide a fun, engaging and competitive way to learn about innovation superclusters around the world. Today, it is regularly used by global cluster experts, ecosystem builders, national cluster programs and cluster managers to build better clusters around the world. Working with the ISED Global Innovation Cluster team in 2025, this was a unique and exciting opportunity to bring together key ISED staff, global cluster expertise and run a fast-paced, expert-level Supercluster! Session.

OUTCOME:

Highly competitive teams quickly formed up global supercluster management teams, stepping into the roles of cluster strategists, cluster boards and cluster leaders. Choosing from a series of ‘case’ clusters, we had Canadian, Norwegian, Chinese and Swiss clusters competing to build out their cluster strategy, secure members, lock in funding and deliver cluster innovation projects. In just a few hours, participants got a chance to not just strategize about cluster development and economic competitiveness, but truly experience the nuances and challenges of building a global innovation Supercluster.

WHY IT MADE THE TOP 10 LIST:

The Global Innovation Cluster team at ISED is one of the world’s most experienced ministry-level teams supporting a national cluster program anywhere. To sit down and race through the Supercluster! Simulation with them in a collaborative, yet ultra-competitive format was somewhere between hyper-competitive and ultra-delightful.

In the global innovation cluster landscape, Canada has truly carved out a leading position, a global position over the past few years. Now, spending several days in Ottawa with the cluster team and their ecosystem development peer teams was highly insightful. Finding time to work through the Supercluster! Simulation allowed everyone to yet again, be reminded of the powerful effects of successfully building and expanding innovation superclusters. Just like with our IMD case study (above), having truly experienced people completing one of the sims in record pace, shows how high-value, high-impact, even a 4 hour session can be. That’s why we include ISED’s Supercluster! Sim in the 2025 ranking.

DELIVERY TEAM: Chris Rangen

Any country can develop Superclusters!

10. Fund Manager! Masterclass (Mauritius)

WHO: Equitable Ventures, in partnership with Simera

WHERE: Mauritius

DURATION: 3 days

WHY THE SIM?

Most parts of the world are still in their early steps of developing a rich, robust venture capital ecosystem. From VC education, emerging GP acceleration, depth of knowledge of the VC asset class and building out national fund-of-fund strategies; most parts are still learning.

Zoom in on Africa the this picture just expands. With a massive youth population, rising middle class and a steep economic development path, the African venture capital ecosystem is expected to undergo a massive transformation in the coming decades.

But to get there, we need to work at an ecosystem level to upskill and support all the key building blocks.

This was the path that led us to partner with Equitable Ventures and Simera, to bring the Fund Manager! Masterclass to Mauritius for the very first time in 2025.

OUTCOME:

Over three intense days, four teams set up four GP companies, raising eight funds This could have been in New York, Frankfurt, or Abu Dhabi, but it was in Mauritius. The program was not for Silicon Valley VCs. It was for developing a new generation of LPs, GPs, and ecosystem backers—for Africa, in Africa.

“It’s really impressive how the Fund Manager! simulation closely mimics the real life experiences of fund managers in Africa so this session makes up for a great learning experience. The facilitator’s experience, particularly their global insights, are a very rich addition to the whole experience. I would highly recommend this training to anyone working in Africa’s venture capital ecosystem.”

– Cikü Mugambi, Investment Director, DOB

Pitching LPs is a full-time job!

WHY IT MADE THE TOP 10 LIST:

We absolutely love running Fund Manager!, covering the full fund journey, nearly 15 years, in just three days. It’s intense, it’s complex, it’s packed with learning that can save both GPs and LPs years of pain. Getting a chance to partner with EV and Simera to run this Masterclass in Mauritius was a superb start. Looking ahead, we already have multiple conversations going on how we can best support the maturing VC ecosystem on Mauritius, in turn supporting the ongoing growth of the entire African VC ecosystem. Fund Manager! Mauritius was one of the absolutely best Fund Manager! Sessions in 2025 and we could not be more grateful to the GPs, family offices and LPs that invested three days together with us on Fund Manager! Mauritius.

FULL CASE STUDY: From early strategy to billions in DPI

DELIVERY TEAM:  Chris Rangen, Scott B. Newton

How we returned millions to our LPs

Delivered by a global community

Congratulations to our key partners and expert facilitators for making these 87 Strategy Sims sessions happen. Representing a true, global expert community, this would not have been possible without a massive effort from Scott (Italy), Ljubisa (Serbia), Sanjana (UAE), Vishal (UK), Rumbi (UK/South Africa), Jen (UK), Alain (UAE), Mohammed (Oman) and Stuart (Canada), Michael (Canada), Rick (US), Wan Fadzil (Malaysia), Suhail (Bahrain), Javier (Mexico), and many more.

Kickstart 2026 by learning more about Strategy Sims in action

Since inception, Strategy Sims have grown into a global phenomena, with 10.000 people, 400+ sessions, 70+ facilitators and ten unique Strategy Sims. Now you can read how global practitioners use Strategy Simulations to drive learning, mastery and change. In August 2025, the global community came together to co-author the first ever report, Strategy Sims in Action. Read it today.

What you get in the report

●     An overview of the ten Strategy Sims

●     Case studies from leading business schools and companies

●     Expert insights from leading strategy experts

●     How Global Partners Use Strategy Sims in Action

●     The Strategy Sims Methodology

●     How to get started

●     …and much more

Get the Strategy Sims in Action report today.

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The Fund Journey: An Emerging Manager’s Story from Kuala Lumpur to South-East Asia. Part I (Years T-2 to 1)

From Fund I ($10M) to Fund III ($50M) in Six Years. A Three-Part Series on Building a South-East Asian Venture Capital Firm from Scratch

Written by Christian Rangen, advisor to VC funds, Fund-of-funds, faculty,

Written through the lens of Aisha Rahman, Founding Partner, Meridian Ventures With insights from: Rizal Tan, Co-Founder & General Partner, Meridian Ventures-

The people and companies are largely fictional for the purpose of this article, based on the Fund Journey Map and GP Fundraising Team canvas by Chris Rangen, Strategy Tools.

Read parts II and III.

Part I: From Idea to First Close (T-2 to Year 1)

The journey from “we should start a fund” to actually managing institutional capital is longer, harder, and more humbling than almost any first-time fund manager expects. Here’s how one South-East Asian emerging manager navigated those critical early years—and learned the hard way that fundraising requires a completely different skill set than investing.

It’s 11:47 PM in Kuala Lumpur, and I’m staring at a spreadsheet that makes no sense. We’ve been working on our fund concept for eighteen months now, and I still can’t articulate why a family office would trust us with $2 million when we’ve never managed a fund before.

Rizal is asleep on the couch in our tiny shared office—a converted shophouse in Bangsar that we’re renting month-to-month because we can’t commit to a lease until we know if this fund will actually happen.

That was Year T-1. Six years later, we would be managing $85 million across three funds—Fund I ($10M), Fund II ($25M), and Fund III ($50M)—having raised a new fund every 20 months on average. We would establish ourselves as one of South-East Asia’s most consistent emerging-stage performers and a genuine thought leader in the region’s venture ecosystem.

But in that moment? I genuinely didn’t know if we’d make it past first close.

This is the story of our fund journey—the real one, not the polished version we tell at conferences. If you’re an emerging manager in South-East Asia, or thinking about becoming one, pay attention to the ecosystem builders who helped us along the way. And pay close attention to our fundraising evolution—because that’s what ultimately made the difference between survival and success.

Behind the idea, fund economics 101

Year T-2: The Idea Takes Shape

The Spark

Rizal and I met at a fintech conference in Singapore in 2017. He was running business development for a Series B payments company backed by Golden Gate Ventures; I was a principal at a mid-sized regional VC that was, frankly, underperforming.

Over teh tarik at a mamak in Petaling Jaya, we complained about the same things: VCs who didn’t understand founders. Decision-making processes that took months. Partners who’d never built anything themselves. The disconnect between what South-East Asian founders needed and what most regional funds delivered.

“We should start our own fund,” Rizal said, half-joking.

“We should,” I replied, not joking at all.

That conversation planted a seed that would consume the next three years of our lives.

The Reality Check

Starting a fund isn’t like starting a company. You can’t bootstrap it. You can’t build an MVP and iterate. You need LP commitment before you can do anything—and LP commitment doesn’t flow to people without track records.

We spent the first six months of Year T-2 doing what I now call “the reality audit.”

Market Opportunity Assessment: We mapped the South-East Asian early-stage landscape, with particular focus on Malaysia, Indonesia, Vietnam, and the Philippines. What we found was both encouraging and terrifying. Encouraging: a genuine gap existed for founder-friendly, operationally-focused pre-seed and seed investors in the $200K-$1M range. Singapore had become expensive for startups, and regional founders needed alternatives that understood local markets. Terrifying: at least 30 other groups were circling the same opportunity, and several established Singapore VCs were beginning to look downstream.

The Malaysian Ecosystem Landscape: Early in our research, we discovered the critical role of Cradle Fund in Malaysia’s startup ecosystem. Cradle had been nurturing early-stage companies since 2003, providing grants and coaching that created the very dealflow we hoped to invest in. Understanding Cradle’s portfolio became essential to our thesis—many of our future portfolio companies would be Cradle alumni. We also mapped the roles of MDEC, MaGIC, and various state-level initiatives. South-East Asia’s venture ecosystem wasn’t just Singapore anymore.

Team Capabilities Audit: Between us, we had twelve years of relevant experience. Rizal had operator credibility from his startup years and deep fintech knowledge. I had investment experience, but as a principal, not a decision-maker. Neither of us had carried interest (the profit share that defines GP economics). Neither of us had ever raised institutional capital.

Investment Thesis Development: This is where most emerging managers fail first. They have a vague idea—“we invest in great founders”—but no differentiated thesis that answers the question every LP will ask: Why you? Why now? Why this strategy?

We spent three months developing our initial thesis. Early-stage generalist tech across South-East Asia, with initial focus on Malaysia and Indonesia, concentrating on B2B software and fintech, with a contrarian bet on founders from non-traditional backgrounds who were overlooked by establishment VCs. Check sizes of $200K-$800K, targeting 12-15 investments over a three-year deployment period.

The Honest Assessment: By the end of Year T-2, we had a thesis we believed in, complementary skills, and genuine founder networks from our previous roles. What we didn’t have: LP relationships, a track record as GPs, or any idea how to actually raise a fund.

The Fund Manager! Masterclass: A Turning Point

In late Year T-2, we made a decision that would fundamentally change our trajectory: we enrolled in the Fund Manager! Masterclass run by Strategy Tools.

“It blew our minds,” Rizal later told other emerging managers. “We thought we understood venture capital because we’d worked in the industry. The Masterclass showed us we didn’t understand the first thing about running a VC firm; and definitely not about delivering net DPI back to LPs.”

The Masterclass covered fund economics, LP prospecting, portfolio construction, value creation and DPI in ways that academic programs never touched. But the real value was the simulation component—practicing LP pitches, running investment committee discussions, and navigating the inevitable cash flow crunches that plague emerging managers. It was intense, but incredible.

We left the Masterclass with a completely revised approach:

•            Our fund target dropped from $30M (too ambitious for first-time managers in South-East Asia) to $10M (achievable and sustainable).

•            Our thesis sharpened around specific value-add we could provide: operational support for B2B go-to-market.

•            We understood the brutal economics of small funds—and planned accordingly.

Most importantly, we had a realistic understanding of the economic challenges ahead. The Masterclass didn’t make fundraising easy. It made us prepared for how hard it would actually be.

Key Learnings from Year T-2

Looking back, we made two critical decisions that year that shaped everything that followed.

Decision 1: We chose generalist over specialist. Many advisors told us to pick a vertical—“focus on fintech only” or “own the Malaysian SaaS space.” We resisted. Our thesis was that the best opportunities at seed stage in emerging South-East Asian markets often came from unexpected intersections. A generalist approach gave us flexibility but made our LP pitch harder. We’d need to defend that choice hundreds of times.

Decision 2: We committed to doing this together or not at all. Rizal had a standing offer to return to his old company as VP of Strategy. I had recruiters calling about partner-track roles at larger regional funds. We agreed: if we hadn’t reached first close within two years, we’d both move on. That deadline created urgency but also alignment.

Year T-1: The Fundraising Education Begins

(And it was a very hard school)

January-March: Building the Foundation

Year T-2 started with a sobering realization: we knew nothing about LP fundraising.

I’d spent years helping portfolio companies raise capital from VCs. The dynamic there is relatively straightforward—founders pitch investors who make decisions in weeks. LP fundraising is an entirely different animal.

The first quarter was pure education:

We read every book on fund formation we could find. We attended two LP conferences as observers (paying full tickets we couldn’t afford). We cold-called fifteen fund managers who’d raised first-time funds in South-East Asia, asking them to share their experiences. Most were incredibly helpful.

What we learned was humbling:

The average first-time fund takes 18-24 months to raise. Many take longer. Most never close at all. In fact, 75% of all GP teams give up before their coveted first close. LPs receive hundreds of fund pitches per year and invest in perhaps 2-3% of them. First-time managers face a structural disadvantage: LPs prefer to re-up with existing managers rather than take risk on unproven GPs.

This journey is likely to be harder, a lot harder than we first expected

Grace Choo’s perspective (Regional Lead, IFC):

“When I look at emerging managers, I’m not just evaluating the strategy. I’m evaluating the people and their ability to survive the inevitable hard times. Most first-time funds face an existential crisis within the first three years—deal-flow problems, portfolio blowups, partnership tensions. The question is: do these GPs have the resilience and alignment to get through it together?”

April-June: Legal Setup and GP Economics

We incorporated our management company in April. This sounds simple. It wasn’t.

The legal complexity almost derailed us:

Fund structure: Labuan IBFC? Singapore VCC? Cayman Islands? Each jurisdiction had different tax implications, different regulatory requirements, different costs. We spent $25,000 on legal fees just to understand our options—money we funded personally from savings.

GP commitment: LPs expect GPs to have meaningful skin in the game, typically 1-3% of fund size. For a $10M target fund, that meant $100K-$300K of personal capital. We didn’t have that. We’d need to bootstrap it through management fee deferrals and side arrangements.

Management fee: The standard 2% management fee on a $10M fund generates $200K per year. Sounds manageable until you realize that covers salaries, office, legal, travel, fund administration, and everything else. For two GPs, the math is brutal.

The GP business model realization:

Most people outside venture don’t understand this: fund management is a terrible business until you have multiple funds under management. The economics only work at scale. A single $10M fund generates enough management fee to survive, not thrive. Real GP wealth comes from carried interest—but that only materializes 7-10 years later, and only if performance is strong.

We modeled our GP business plan obsessively that quarter. The conclusion: we’d need to launch Fund II within 2-4 years to build a sustainable management company, and we’d need Fund I to perform well enough to attract larger commitments.

Building the LP Market Map with Asian Development Bank

One of the most valuable relationships we built during Year T-2 came through an introduction to Craig Dixon and Ian Lee at the Asian Development Bank (ADB).

ADB had been increasingly active in the South-East Asian venture ecosystem, not just as investors but as ecosystem builders. Craig and Ian were leading their emerging manager support program, and they agreed to spend time with us despite our lack of track record.

“We spent three intensive sessions with the ADB team building what we called our LP Market Map for South-East Asia,” I later explained at an AVCJ conference. “This wasn’t just a list of potential investors. It was a comprehensive mapping of LP types, their typical allocation patterns, their decision timelines, and crucially, their appetite for emerging managers.”

The LP Market Map revealed several critical insights:

•            Most institutional LPs in the region had minimum check sizes of $5-10M, making them impractical for a $10M fund.

•            Family offices and high-net-worth individuals were more accessible but required different approaches.

•            Development finance institutions (DFIs) like ADB and IFC had specific mandates that we could potentially align with—but typically required larger fund sizes.

•            Fund-of-funds focused on emerging managers were starting to look at South-East Asia but had limited presence.

•            Angel networks and HNWI communities across Malaysia, Singapore, and Indonesia represented our most likely Fund I LP base.

July-September: LP Research and the Persona Problem

This was the quarter where we learned the most painful lesson of emerging manager life: LPs are incredibly difficult to understand, categorize, and access.

The LP universe is vast and fragmented:

Family offices (thousands of them across Asia, all different), pension funds (long decision cycles, high minimum commitments), fund-of-funds (professional allocators, very competitive), sovereign wealth funds (policy objectives, bureaucracy), corporate venture arms (strategic agendas), government programs (economic development mandates), endowments and foundations (mission alignment required), and high-net-worth individuals (relationship-driven, inconsistent).

We made every rookie mistake:

We built a target list of 550 LPs without understanding that 430 of them would never invest in a first-time $10M fund. We sent cold emails with our deck attached (never do this). We requested meetings without warm introductions (rarely works). We pitched our strategy without first understanding what each LP was looking for.

The LP persona problem:

Here’s what nobody tells emerging managers: LP motivations are incredibly diverse, and you can’t pitch the same way to all of them.

A family office investing generational wealth wants something completely different from a fund-of-funds managing institutional capital. A government development agency optimizing for economic impact has different priorities than a pension fund optimizing for risk-adjusted returns.

We wasted three months pitching features instead of benefits, strategy instead of fit.

The breakthrough moment came in August:

An experienced fund advisor told us: “Stop trying to convince LPs your fund is good. Start trying to understand which LPs your fund is good for. Ask yourself. ‘how are our customers? And why would they care?”

That shift changed everything.

We went back to our LP research and re-categorized everyone based on their likely priorities:

• Return-maximizers: Need top-quartile potential, accept higher risk, want concentrated portfolios

• Diversifiers: Want exposure to South-East Asian tech, acceptable returns, lower risk tolerance

• Strategic allocators: Have specific theses about sectors or geographies, want alignment

• Relationship investors: Invest based on people first, strategy second, need deep trust

• Mission-aligned: Prioritize impact alongside returns, want ESG integration

• Access-seekers: Want deal flow visibility, co-investment rights, portfolio company access

This framework helped us prioritize and customize. We stopped mass-pitching and started targeted outreach.

The Strategy Tools LP AI Platform: Practice Before the Real Thing

During this period, we discovered the Strategy Tools LP AI platform—a tool that allowed us to practice pitching to different LP personas before meeting them in real life.

“We found this immensely helpful,” Rizal recalled. “The platform let us practice nailing LP personas and value propositions pre-launch. We could simulate a conversation with a skeptical family office patriarch, a process-driven fund-of-funds, or a mission-focused DFI—and get feedback on how to improve our pitch for each.”

We ran through dozens of simulated LP conversations, refining our answers to the tough questions:

•            “Why should we trust first-time managers?”

•            “How will you compete against established Singapore funds?”

•            “What happens if you don’t raise enough capital?”

•            “Why Malaysia as your base?”

•            “What’s your edge in deal flow?”

Strategy Tools LP AI Platform, a superb way to practice on LP Personas

October-December: First LP Meetings and Brutal Feedback

By October, we had our legal structure in place, our deck polished (we thought), and our target list refined. We started taking meetings.

The first twenty LP meetings were a massacre:

“Your track record is insufficient.” (We knew this, but hearing it repeatedly was demoralizing.)

“Your fund is too small for our minimum commitment.” ($2M minimums into a $10M fund don’t work.)

“We’re not looking at emerging managers this cycle.” (Then why did you take the meeting?)

“Your thesis sounds like every other generalist fund.” (Ouch. They weren’t wrong.)

“Come back when you have a few investments to show us.” (The classic chicken-and-egg problem.)

Pitching, pitching; but getting no response

Grace Choo’s perspective:

“I remember meeting Aisha and Rizal for the first time in late 2018. They were clearly smart, clearly passionate, and clearly unprepared for LP diligence. Their deck was too long. Their financial projections were too optimistic. They couldn’t articulate their differentiation in under sixty seconds. But what I did see was founder-quality determination. They took our feedback seriously. When they came back three months later, the improvement was dramatic. That’s the signal I would later invest behind—not perfection, but trajectory. Of course, fund I was not a good fit for us, but these conversations did lead us into fund II a few years later.”

December reality check:

By year-end, we had met with 93 potential LPs. We had zero commitments. Not soft commitments, not verbal interest—zero. Our personal savings were running low. Rizal’s wife was expecting their first child. I had stopped paying myself entirely, living off credit cards.

We had a hard conversation that Christmas: do we continue, or do we accept that this isn’t working?

We decided to give it six more months—but we needed to change our approach fundamentally.

The Cash Flow Reality: Surviving Pre-First Close

Here’s the dirty secret of emerging manager life that nobody talks about enough: you need working capital to operate before your management company generates fee income.

Our cash flow situation in Year T-2 was brutal:

Expense Category Amount

Legal fees for fund formation: $25,000

Travel to LP meetings and conferences: $15,000

Basic operations: $18,000

Deferred salaries (we weren’t paying ourselves): $0

Total pre-revenue burn ~$58,000

We funded this through personal savings, a small loan from Rizal’s uncle, and increasingly uncomfortable credit card debt. I stopped paying myself entirely. Rizal worked a consulting gig on the side to keep his family afloat.

This is the part of fund formation that the glossy conference panels never discuss. The reality is that most emerging managers in South-East Asia are living on the edge of financial viability until first close—and many give up before they get there. The 75% failure rate for first-time GPs isn’t because they have bad strategies. It’s because they run out of money and willpower before the strategy can be proven.

Year 0: The Long Road to First Close

January-March: Repositioning and Re-engagement

The first quarter of Year T-1 was about radical honesty.

What wasn’t working:

Our pitch was generic. Our main deck was too long (28 slides—should have been 12). Our answer to “why you?” was unconvincing. Our LP targeting was scattershot. Our follow-up was inconsistent. We did not use our LP CRM well enough. We were not disciplined. We had nothing about LP value propositions. We only discovered that part later.

Adding more leads to your CRM does not help if your fundraising narrative is broken

What we changed:

We rebuilt our deck from scratch, focused on three things: team credibility, differentiated thesis, and LP value proposition. We cut everything else.

We developed specific LP personas with tailored pitch angles:

• For successfully exited founders in the region: Emphasized deal flow access and co-investment opportunities in the next generation of South-East Asian startups

• For active business angels: Emphasized portfolio diversification and professional fund management

• For HNWIs: Emphasized regional exposure and access to venture as an asset class

• For single family offices: Emphasized our accessibility, direct GP relationship, co-investment opportunities

• For angel networks: Emphasized our systematic approach to sourcing and supporting startups they could also access

We implemented a proper CRM (finally) and started tracking every LP interaction systematically. No excuses.

Using the LP personas x VP Canvas to nail the key message

Even more importantly, we started developing and iterating on the LP Personas x Value Proposition canvas for each of our LP personas, and for every LP we engaged with. It was awkward, slow even, in the beginning, but it helped us really tune into who are LPs were and what they cared about.

The LP Personas x Value proposition canvas on a successfully exited founder

The breakthrough conversation:

In February, an LP we’d met six months earlier agreed to a second meeting. This time, they engaged differently. They asked about specific portfolio company scenarios. They probed our valuation discipline. They questioned our reserves strategy.

After ninety minutes, they said: “We’re interested in a $500K commitment if you can reach first close by June.”

Conditional, yes. But it was the first real signal of momentum.

Going to market with a better deck

April-June: Building LP Momentum

The domino effect:

That conditional commitment changed our LP conversations overnight. We went from “no one has committed yet” to “we have strong LP interest and expect first close within months.”

The power of anchor LPs:

We learned that LP fundraising has a herd dynamic. Once one credible LP commits, others become more comfortable. The first commitment is impossibly hard; the next ones are merely very hard.

In April, we secured a second conditional commitment from a Malaysian family office—$750K. In May, contributions from two angel networks indicated $1.2M combined. By June, we had verbal commitments totaling $4.5M.

The working capital problem resolved (barely):

We solved this inelegantly: Rizal took out a personal loan against his apartment. I maxed out my credit line. We deferred our own salaries entirely. It was financially precarious and emotionally exhausting.

Some emerging managers solve this through GP seeding programs or anchor LP arrangements that include working capital provisions. We didn’t have that luxury.

July-September: Legal Documentation Marathon

With LP momentum building, we entered the documentation phase.

LPA negotiations are brutal:

The Limited Partner Agreement (LPA) is the legal document that governs everything: fee structure, carry waterfall, GP removal provisions, key person clauses, investment restrictions, reporting requirements.

Every LP wanted changes to our draft LPA. Some wanted lower fees. Some wanted specific co-investment provisions. Some wanted side letters with enhanced reporting or most-favored-nation clauses.

We spent three months in legal negotiations that cost another $40,000 in attorney fees.

Key terms we fought for:

•            Standard 2% management fee (some LPs pushed for step-downs)

•            20% carried interest with 8% hurdle and European waterfall

•            4-year investment period with possible 1-year extension

•            10-year fund life with two possible 1-year extensions

•            Key person clause covering both Rizal and me

•            GP commitment of 2% ($200K on a $10M fund—we’d figure out how to fund it through fee deferrals)

Key terms we conceded:

•            Enhanced reporting to larger LPs (quarterly portfolio reviews, annual LP meetings)

•            Co-investment rights for LPs on deals over $500K

•            Advisory committee with LP representation

October-November: Racing to First Close

By October, we had $7M in executed subscription documents. Our target was $8M for first close, which would allow us to start investing with credibility.

Backing innovators, just need to close our fund first

The final push:

We called every warm LP relationship. We accelerated meetings with anyone showing interest. We offered modest fee concessions to LPs who could commit quickly.

The November crisis:

Three weeks before our target first close date, one of our committed LPs—an HNWI representing $1M of commitments—went silent. Emails unanswered. Calls unreturned.

After a week of panic, we learned through back channels that he was going through a divorce and had frozen all discretionary investments. Our $1M was gone.

We had two weeks to find $1M or miss first close. Missing first close would signal weakness to existing LPs and potentially trigger uncommit clauses.

The scramble:

Rizal flew to Hong Kong to meet face-to-face with a family office that had expressed interest months earlier but couldn’t meet our timing. I worked the phones, reaching out to every contact who’d ever shown warmth.

In the end, a successful entrepreneur we’d met at a Cradle Fund event committed $600K, and the Hong Kong family office committed $500K contingent on meeting Rizal in person (which he’d just done).

We made first close with $8.1M—not the $10M we wanted, but enough to start.

Year 1: First Close and First Investments

December-January: Operational Reality

First close on December 15th felt like victory. The relief was physical—I slept for fourteen hours straight.

But first close isn’t the end; it’s the beginning:

Capital calls went out. Management fee income started flowing, but we were still understaffed and under-resourced. Our $8.1M fund would generate roughly $162K in annual management fees. After legal, administration, office, and basic operating costs, we had enough to pay ourselves modest salaries—and nothing more.

The capital call mechanics:

We learned that fund accounting is surprisingly complex. Capital calls need to be calculated precisely, documented properly, and communicated to LPs with adequate notice. Our fund administrator handled most of this, but we still needed to understand it.

First capital call: $2M (roughly 25% of commitments), to be deployed over the first 12-18 months plus reserves.

The Friends, Family, and Angels Reality of Fund I

For Fund I, we failed at raising any institutional capital.

Every DFI we approached said our fund was too small. Every fund-of-funds said we lacked track record. Every pension fund said their minimums exceeded our entire fund size.

We had to pivot completely. Instead of institutional capital, we built Fund I from friends, family, high-net-worth individuals (HNWIs), angels, angel networks, and two local family offices.

Fund I Final LP Roster:

LP Type Commitment

Malaysian Family Office #1 $1.5M

Hong Kong Family Office $1M

Singapore HNWI (exited founder) $1.4M

AngelCentral Malaysia network $800K

Malaysian angel syndicate $700K

Various HNWIs (6 individuals) $2.7M

Friends & family $500K

GP Commitment (deferred) $200K

Fund I Total $10M (final close)

Final close at $10M came in March of Year 1, adding another $1.9M from additional HNWIs who saw our early momentum.

Fund I Economics: The Brutal Math

Let me share the fund economics of a $10M first fund, because this is where many emerging managers miscalculate:

Item Amount

Fund Size $10,000,000

Annual Management Fee (2%) $200,000

Fund Administration & Legal -$35,000

Office & Operations -$25,000

Travel & LP Relations -$20,000

Available for Salaries $120,000

$120,000 per year for two partners. That’s $60,000 each—less than entry-level roles at banks or corporations in KL, and far less than what we’d been earning in our previous roles.

The economics only work at scale. A single $10M fund generates enough management fee to survive, not thrive. Real GP wealth comes from carried interest—but that only materializes 7-12 years later, and only if performance is strong. This is why we knew from day one that Fund I was just the foundation. We would need to launch Fund II within 2-4 years to build a sustainable management company.

February-June: First Investments

Investment #1: DataSync (April, Year 1)

B2B analytics software for SMEs. Two founders from Grab’s data team. Pre-product, but extraordinary clarity on the problem they were solving. We led a $600K seed round, investing $400K.

Making that first investment decision was terrifying. Every doubt I’d had during fundraising resurfaced: Are we really qualified to make this call? What if we’re wrong? What if we’re just two people who convinced some LPs to trust us and now we’re about to deploy their capital into a company that fails?

Rizal talked me off the ledge. “We did the work. We believe in the founders. We understand the market. This is literally what we raised money to do.”

He was right. We wired the money.

Nothing beats closing a term sheet

Investment #2: PayMalaysia (May, Year 1)

Payments infrastructure for Malaysian marketplaces. Solo founder, ex-Maybank digital banking lead. Slightly further along—had a working product and three pilot customers. We lead an $800K round alongside an angel syndicate, investing $350K.

June 30 position:

Two investments deployed. $750K invested out of $10M committed. Management fee covering operations. Team of two GPs plus one part-time analyst. We were officially in business.

July-December: Continuing Portfolio Build

Investment #3: CloudSEA (August, Year 1) — SaaS for regional SME operations. Three-person founding team from enterprise software backgrounds. Early revenue, strong NPS. We invested $500K to lead a $1M round.

Investment #4: SecureKL (October, Year 1) — Cybersecurity for Malaysian enterprises. Deep tech founding team from local universities. Pre-revenue but compelling technology. We invested $300K in a $600K round.

Investment #5: LogiTech Asia (November, Year 1) — Last-mile logistics optimization for e-commerce. Solo founder, former Lazada operations manager. Pilot agreements with two major retailers. We invested $400K to lead her seed round.

Year 1 Portfolio Snapshot:

Company Investment

Status DataSync $400K Building product, pre-revenue

PayMalaysia $350K Growing, 5 customers

CloudSEA $500K Early revenue, expanding

SecureKL $300K Pre-revenue, developing

LogiTech Asia $400K Pilot stage

Total Deployed $1.95M 19.5% of fund

Year 1 Summary

By December 31 of Year 1, we had:

•            $10M in committed capital across 14 LPs

•            5 investments made, totaling $1.95M deployed

•            A functioning (if lean) operation with 2.5 team members

•            Management fee income covering basic expenses

•            Survived

We hadn’t thrived. We were chronically under-resourced. Our LP reporting was messy. Our portfolio support was reactive rather than proactive. I was working 70-hour weeks and still falling behind.

But we had survived. And in the emerging manager game, survival is the first milestone.

Key Takeaways from Part I

For aspiring fund managers:

1. The timeline is longer than you think. Budget 2-4 years from concept to first close. We took nearly 3 years.

2. LP fundraising is its own skill set. Experience investing or operating doesn’t translate directly. Study LP motivations obsessively.

3. Work backwards from GP economics. Understand what fund size you need to build a sustainable management company. Too small = you starve. Too large for an emerging manager = you don’t close.

4. Conditional commitments unlock momentum. One credible LP commitment changes every subsequent conversation. Prioritize getting that first anchor.

5. Working capital is existential. Have a plan for how you’ll fund operations before management fees flow. This is the most common emerging manager failure point.

6. Legal costs are real. Budget $75K+ for fund formation in South-East Asia. It’s unavoidable.

7. First close isn’t final close. Keep fundraising momentum through the investment period.

Grace Choo’s final perspective on Part I:

“Aisha and Rizal nearly quit three times during their fundraising journey. I know because they told me later, after Fund I was performing well. What they didn’t realize at the time was that their struggle was evidence of their commitment, not evidence of failure. Every emerging manager I’ve backed has had moments where they questioned whether it was worth it. The ones who break through are the ones who find a way to keep going. The Fund Journey Map shows this path clearly—but living it is another matter entirely.”

Ready for part II and III? Follow Aisha and Rizal’s journey into year 2,3 and beyond.

Read part II here and part III here.

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The Fund Journey: An Emerging Manager’s Story from Kuala Lumpur to South-East Asia. Part II: Investment Period and the Birth of Fund II (Years 2-5)

Continued from Part I (years T-2 -1). Read part I here, and Part III here.

Through the lens of Aisha Rahman, Founding Partner, Meridian Ventures With insights from: Rizal Tan, Co-Founder & General Partner And: Priya Nair, CEO, DataSync (Portfolio Company)

The investment period is where fund strategy meets market reality. For Meridian Ventures, Years 2-5 would test every assumption in our thesis—and force us to make decisions that would determine whether Fund I would succeed or fail. More importantly, it would teach us that building a world-class fundraising team was the key to our survival.

Year 2: Building the Portfolio

January-March: Deployment Accelerates

Year 2 began with unfinished business—we were still seeking to fill out our Fund I portfolio while simultaneously supporting our initial five investments.

The portfolio construction challenge:

Fund I targeted 12-15 investments. With $10M and roughly 30% reserved for follow-ons ($3M), we had $7M for initial investments. Average initial check: $450K-$600K.

Our investment period was 3-4 years, but best practice suggested deploying most capital in years 1-2 to allow adequate time for value creation before exits.

Target deployment pace: 4-5 investments per year in Years 1-2, slowing in Years 3-4.

Q1 investments:

Investment #6: HealthTech MY (February, Year 2) — Digital health platform connecting patients with specialists. Strong team from the Malaysian healthcare system. Complex regulatory environment, but a genuine market need. $450K investment.

Investment #7: PropTech.asia (March, Year 2) — Commercial real estate analytics. Data-driven approach to property valuation across South-East Asian markets. Two experienced founders from the real estate industry. $400K investment.

April-June: First Portfolio Challenges Emerge

By summer, reality started diverging from our investment memos.

DataSync: The early warning signs

Our first investment wasn’t developing as expected. The founding team—brilliant data scientists from Grab—struggled with go-to-market execution. Six months post-investment, they had built an impressive product with almost no customers.

Our board seat gave us visibility, but limited control. We pushed for them to hire a commercial co-founder. They resisted, believing the product would sell itself.

The VC’s dilemma:

This is where active ownership gets complicated. We had conviction in the market and product, but growing concerns about execution. Do we push harder and risk damaging the GP-founder relationship? Do we stay hands-off and hope they figure it out? Do we write more about our concerns in LP reports, potentially signaling problems prematurely?

We chose a middle path: supportive but direct feedback in board meetings, connected them with commercial advisors from our network, and documented our concerns internally while maintaining constructive external positioning.

Rizal’s perspective:

“DataSync taught us something important in Year 1: the gap between investment memo and portfolio reality. On paper, they were perfect—ex-Grab team, clear market need, technical excellence. In practice, they had a fundamental gap in commercial DNA. As investors, we could coach around the edges, but we couldn’t fix the team composition problem without their buy-in. That’s the limit of VC influence at the seed stage.”

Hunting great deals, but not every deal is going to end well.

July-December: Closing Out Year 2

More investments:

Investment #8: AgriTech ASEAN (August, Year 2) — Precision agriculture software for South-East Asian farms. Strong domain expertise from agricultural extension backgrounds. $350K investment.

Investment #9: EduScale ID (October, Year 2) — EdTech platform for corporate training, Indonesia-focused. First-time founder, but she’d been a customer of this category for years and understood the pain points intimately. $400K investment.

Investment #10: FinFlow (November, Year 2) — Subscription billing platform for regional SaaS companies. Two-time founder (previous exit to a strategic acquirer). More expensive than our typical deals—we paid a premium for founder pedigree. $550K investment.

Year 2 Summary:

Metric Value

Investments made 10 total (5 in Year 0, 5 in Year 1)

Capital deployed $4.1M (59% of initial allocation)

Portfolio value (estimated) $4.5M (modest markups)

Net IRR ~10%

TVPI 1.10x

DPI 0.0x (no distributions)

LP feedback (first annual meeting):

Our first annual LP meeting happened in November, Year 2. The feedback was mixed.

Positives: LPs liked our pace of deployment, the quality of our deal sourcing, and our transparent reporting.

Concerns: Multiple LPs questioned why we’d invested in 10 companies before having meaningful traction data from our earliest investments. Were we deploying too fast? Should we have waited to see DataSync progress before committing more capital? This was fair criticism. We defended our approach—the market window for seed deals doesn’t wait, and batch deployment is normal—but we heard the underlying anxiety.

Year 3: The J-Curve Bites Hard

January-March: Portfolio Divergence Accelerates

Year 3 revealed the brutal reality of seed-stage investing: outcomes diverge fast.

The winners emerging:

PayMalaysia signed a partnership with a major Malaysian bank, gaining access to 25,000 SME customers. Their MRR jumped from $15K to $45K in a single quarter.

CloudSEA landed their first enterprise customer and began generating real revenue. The founding team proved they could sell, not just build.

FinFlow—our expensive bet on the serial founder—launched and acquired 80 paying customers within three months. Unit economics looked strong.

The troubled middle:

LogiTech Asia was progressing but slowly. Their pilot customers liked the product but were reluctant to commit to scaled rollouts. The solo founder was burning out, handling everything herself.

SecureKL hit regulatory complexity we’d underestimated. Malaysian cybersecurity compliance required certifications that would take 12-18 months to obtain.

AgriTech ASEAN was pre-revenue and burning cash on R&D. The founders were making technical progress but had no commercial traction whatsoever.

The failures materializing:

DataSync continued its slow death march. By March, Year 3, they had signed only two customers—both small, low-ACV deals that didn’t validate the business model. Cash was running low.

The write-down conversation:

For the first time, we had to discuss portfolio write-downs with our LPs.

Our policy was to mark investments at fair value quarterly, based on either subsequent financing rounds or internal assessment. DataSync hadn’t raised follow-on capital, and our internal assessment suggested the company was worth significantly less than we’d paid.

The decision: Mark DataSync down by 50%. Our $400K investment was now carried at $200K.

This single write-down dropped our fund TVPI from 1.12x to 1.05x.

Grace Choo’s perspective (LP advisor, though not yet an investor):

“I remember Aisha calling to tell me about the DataSync write-down. She was clearly uncomfortable—admitting their first investment was struggling felt like a personal failure. But I actually gained confidence from that call. They weren’t hiding problems. They weren’t massaging valuations to look better. They were being straight about challenges. That’s exactly what I want to see from GPs.”

April-September: The Capital Crisis and Critical Decision

DataSync reaches the breaking point:

By July, DataSync had 4 months of runway remaining. The founding team came to us with two options:

Option A: Bridge financing to buy time for one more pivot attempt. They wanted $150K from existing investors to extend runway by 8-10 months.

Option B: Shut down the company, preserve remaining capital for investor return, accept failure.

This was our first major follow-on decision. The Fund Journey Map shows this moment clearly—the choice between doubling down and writing off.

The analysis:

We ran the numbers cold. DataSync had burned $500K (our $400K plus other investor capital) with almost nothing to show for it. The founding team had proven they couldn’t find early product-market fit despite multiple pivots. The market for SMB analytics was getting more competitive, not less.

A $150K bridge would increase our exposure to $550K in a company we’d already written down 50%.

Our decision: Don’t participate in the bridge. Let the company find other sources of capital or shut down.

This was painful. We liked the founders personally. We’d championed them to our LPs. Walking away felt like failure.

But the alternative was worse: good money after bad into a company that had demonstrated it couldn’t execute.

The aftermath:

DataSync couldn’t raise the bridge from other sources. In September, Year 3, they shut down and returned approximately $40K to investors. Our $400K investment became a $32K return—a 92% loss.

Priya Nair (CEO, DataSync) perspective:

“Looking back, Meridian made the right call. At the time, I was furious—I thought they were abandoning us. But we’d had 18 months to prove the model and hadn’t done it. Throwing more money at the problem wouldn’t have changed the fundamental issue: we were great at building product and terrible at selling it. I learned more from that failure than from anything else in my career. Two years later, I started a new company with a commercial co-founder from day one. That company is now doing $2M ARR. DataSync’s failure was my most important education.”

The Hard Lesson: We Need to Get Better at Fundraising

By late Year 3, with DataSync written off and the J-curve biting hard, we had a sobering realization.

“If we’re going to survive as a firm,” Rizal said one evening in our Bangsar office, “we need to raise Fund II. And we can’t go through the same scramble we did for Fund I. That nearly broke us.”

He was right. Fund I fundraising had been 18 months of desperation, cold outreach, and near-misses. We’d raised $10M through sheer determination, but we’d burned out in the process. And $10M wasn’t enough to build a sustainable management company.

We needed a systematic approach to fundraising. We needed a real fundraising team.

Building a World-Class Fundraising Team: The Game Changer

Who’s on your capital formation team?

The canvas identifies eight distinct roles that drive successful LP fundraising. We didn’t have eight people—we never would for Fund II—but we deliberately covered each function:

Role Function Our Solution

LP Researcher

Leads all research on prospective LPs, fills top of funnel

Part-time analyst using ADB’s LP database and conference materials

LP Networks & Engagement

Builds deep relationships through events, conferences

Aisha – primary relationship builder through AVCJ, SuperReturn Asia

Deck, Model & Dataroom Builder

Builds and maintains all fundraising materials

Outsourced structure using Strategy Tools templates; Rizal maintained

AI & Automation

Builds automation engine to make LP process 10x faster

LP AI platform for persona practice + custom CRM workflows

GP Leadership

Overall leadership, joins and leads most LP meetings

Rizal – led all key meetings, responsible for overall LP performance

LP Closer

Takes LPs from hello to signature, strong sales focus

Split between Rizal and Aisha based on relationship warmth

LP Whisperer

Elder statesman with networks to top prospective LPs

Advisory board member from major family office + Jim, ex-ADB

LP Process & DD Guide

Guides LPs through entire process from data room to IC

Dedicated support from legal counsel + streamlined process docs

This systematic approach transformed our fundraising capability. Where Fund I had been desperate scrambling, Fund II would be organized execution.

From two GPs to a strong capital formation team and network

Key changes we implemented:

1. Continuous LP engagement: We didn’t wait until we “started fundraising.” We maintained quarterly touchpoints with all Fund I LPs and prospective Fund II LPs from Year 3 onward.

2. Data room always ready: Instead of scrambling to build materials when an LP showed interest, we kept a perpetually updated data room.

3. LP persona customization: Different pitch materials for different LP types, practiced extensively using the Strategy Tools LP AI platform.

4. CRM discipline: Every LP interaction logged, follow-ups scheduled, relationship health tracked.

5. Advisory leverage: Our advisory board member opened doors we could never have opened ourselves.

The IFC Partnership: Becoming Institutional-Ready

One relationship proved transformative during our Fund II preparation: our connection to Grace Choo , Regional Lead at IFC (International Finance Corporation).

Grace had seen hundreds of emerging managers across Asia. She’d watched funds succeed and fail, scale and collapse. When we approached her in Year 3, we weren’t asking for investment (we knew our fund was too small for IFC at that stage). We were asking for guidance.

“We got immense support from Grace to understand how to evolve from Fund I to Fund II, and becoming institutional-scale ready,” I later told other emerging managers at an AVCJ panel.

Her guidance covered several critical areas:

On portfolio reporting: Institutional LPs expected quarterly reports with specific metrics. IFC had templates we could adapt.

On ESG integration: DFIs increasingly required ESG frameworks. Build these now rather than retrofit later.

On governance: Have an Advisory Committee and LP reporting structure that would scale.

On fund size: IFC typically couldn’t invest in funds under $50M, but if we performed well in Fund II, Fund III might qualify.

“Think of Fund II as your audition tape for institutional capital,” Grace advised. “Every decision you make, every report you write, every portfolio company you support—assume that institutional LPs will scrutinize all of it when you come back for Fund III.”

Andrew Senduk: Venture Partner for GTM Excellence

As our portfolio grew, we recognized a gap in our capabilities: go-to-market (GTM) execution. Many of our founders were technical experts who struggled with sales, marketing, and commercial scaling.

In Year 3, we brought on Andrew Senduk as a Venture Partner specifically to address this gap.

Andrew had spent 15 years building and scaling businesses across Indonesia, Malaysia, and Singapore. He’d led GTM for two successful startups (one acquired, one IPO’d) and understood the unique challenges of selling across South-East Asia’s fragmented markets.

Andrew’s perspective on joining Meridian:

“What attracted me to Meridian was their recognition that early-stage investing isn’t just about picking winners—it’s about helping those winners actually win. Most seed-stage founders in South-East Asia are technical builders who’ve never sold enterprise software or scaled a consumer product across multiple countries. That’s where I could add genuine value.”

Andrew worked with six of our Fund I portfolio companies on their GTM strategies:

•            Sales process design for enterprise SaaS companies

•            Market entry strategies for regional expansion

•            Pricing and packaging optimization

•            Customer success frameworks

His involvement became a key part of our LP pitch for Fund II: we weren’t just providing capital, we were providing hands-on GTM expertise that could meaningfully accelerate our portfolio companies’ growth.

Year 4: Portfolio Maturation and Fund II Launch

Portfolio Performance at Year 4:

Company Total Investment Status Current Value Multiple

DataSync $400K Shut down $32K 0.08x

PayMalaysia $450K Series A prep $2.2M 4.9x

CloudSEA $600K Growing $1.5M 2.5x

SecureKL $400K Bridge raised $350K 0.87x

LogiTech Asia $500K Turnaround $550K 1.1x

HealthTech MY $450K Growing $650K 1.4x

PropTech.asia $400K Growing $500K 1.25x

AgriTech ASEAN $350K Struggling $200K 0.57x

EduScale ID $400K Growing $600K 1.5x

FinFlow $550K Pre-Series A $1.8M 3.3x

Year 4 Fund I Metrics:

• Total invested: $4.5M (65% of initial allocation)

• Current portfolio value: $8.4M

• TVPI: 1.55x

• DPI: 0.01x

• Net IRR: ~18%

Fund II Strategy evolution

It was a webinar in March that led to team to step back and reflect. “Our fund II is not just a replica of fund I. We need to think far more strategically”. On the webinar, the team was introduced to the Fund Strategy Canvas, developed by Strategy Tools. Carving out a full-day offsite, the team sat down to complete the Fund Strategy Canvas together.

Fund Strategy Canvas: Meridian Ventures Fund II ($25M)

Fund Name: Meridian Ventures Fund II

General Partners: Aisha Rahman & Rizal Tan

Use the Fund Strategy Canvas for your one-page, visual strategy

THESIS, STRATEGY

Thesis & Size

Meridian Ventures Fund II is a $25M early-stage venture capital fund investing in B2B software and fintech companies across South-East Asia, with primary focus on Malaysia, Indonesia, Vietnam, and the Philippines.

Our thesis is built on three convictions:

First, South-East Asia’s digital economy is entering its enterprise phase. After a decade of consumer internet growth, the next wave of value creation will come from B2B infrastructure—payments, logistics software, enterprise SaaS, and vertical solutions that enable the region’s 70 million SMEs to digitize operations.

Second, the best founders in ASEAN are increasingly emerging from non-traditional backgrounds and geographies outside Singapore. Malaysia, Indonesia, and Vietnam are producing world-class technical talent with deep local market understanding. These founders are systematically overlooked by Singapore-centric VCs who rarely travel beyond Changi Airport.

Third, early-stage companies in emerging South-East Asian markets need more than capital. They need operational support—particularly in go-to-market execution, regional expansion strategy, and preparation for institutional follow-on rounds. GPs who combine capital with hands-on GTM expertise will generate superior returns.

Fund II targets $25M, representing a 2.5x step-up from our $10M Fund I. This size allows us to lead seed rounds of $500K-$1.5M while maintaining meaningful follow-on reserves for winners.

Strategy

Stage: Pre-seed to Seed, with selective Seed+ participation

Check size: $500K-$1.5M initial; up to $2M follow-on in winners

Geography: Malaysia (40%), Indonesia (35%), Vietnam/Philippines (25%)

Sectors: B2B software, fintech infrastructure, vertical SaaS, logistics tech

Target portfolio: 18-22 companies over 3-year deployment period

We invest at the earliest institutional stage—typically first or second money in after angels. Our sweet spot is technical founding teams with clear product vision but limited go-to-market experience. We help them build the commercial muscle to reach Series A.

Unfair Advantage

Our unfair advantage is the combination of three elements no other regional fund possesses:

Operator-investor team: Rizal spent 8 years building and scaling startups across Malaysia and Indonesia before becoming an investor. He’s lived the founder journey and speaks the language of operators, not just financiers.

Ground-level presence: We’re based in Kuala Lumpur, not Singapore. We travel to Jakarta, Ho Chi Minh City, and Manila monthly. We see deals 6-12 months before Singapore-based funds because we’re embedded in local founder communities.

GTM value-add through Andrew Senduk: Our Venture Partner has 15 years of enterprise sales and regional expansion experience. He works directly with portfolio companies on sales process, pricing strategy, and market entry—capabilities that differentiate us from capital-only investors.

TEAM & TRACK RECORD

General Partners

Aisha Rahman, Founding Partner

12 years in venture capital and corporate development. Former Principal at a mid-sized regional VC where she led 15+ investments across ASEAN. Board experience across fintech, SaaS, and logistics companies. MBA from INSEAD. Leads fund strategy, LP relations, and serves on 6 portfolio company boards.

Rizal Tan, Co-Founder & General Partner

8 years as operator, 4 years as investor. Former VP Business Development at a Series B payments company (acquired). Founded and sold a B2B marketplace in Malaysia. Leads deal sourcing, investment decisions, and portfolio company operational support. Deep networks across Malaysian and Indonesian founder communities.

Extended Team

Andrew Senduk, Venture Partner

15 years building and scaling businesses across Indonesia, Malaysia, and Singapore. Led GTM for two successful startups (one acquired, one IPO’d). Works with portfolio companies on sales process design, regional expansion, and commercial scaling. Not full-time but engaged across 6+ portfolio companies per fund.

Two Associates: Handle deal sourcing, due diligence support, and portfolio monitoring. One based in KL, one in Jakarta.

One Operations Manager: Fund administration, LP reporting, and back-office operations.

Track Record

Fund I Performance (as of Fund II launch):

Vintage: 2023

Size: $10M

Investments: 12 companies

TVPI: 1.55x

DPI: 0.02x (one small exit)

IRR: ~18%

Notable Fund I positions: PayMalaysia (4.9x paper, Series A prep), FinFlow (3.3x paper, growing rapidly), CloudSEA (2.5x paper, acquisition discussions). One complete write-off (DataSync), demonstrating follow-on discipline.

Prior Track Record (attributable deals from previous roles):

Aisha: 4 exits from prior fund, including 2 at 3x+ returns

Rizal: Personal angel portfolio of 8 investments, 2 exits at 5x+

LP MIX

Anchor LPs

Jelawang Capital ($4M commitment)

Regional thought leader in South-East Asian venture. Their rigorous due diligence and public commitment provides institutional validation. Jelawang serves on our Advisory Committee and actively supports our LP fundraising through introductions and co-hosted events.

Sarona Asset Management ($3M commitment)

Impact-focused fund-of-funds with emerging markets mandate. Their commitment signals ESG credibility and opens doors to other impact-oriented institutional LPs.

LP Mix Structure

LP Category    Target Allocation         Rationale

Fund-of-Funds (emerging manager programs) $7M (28%) Jelawang Capital, Sarona, Speedinvest, regional FoFs with SEA mandates

Regional Family Offices $6M (24%) Re-ups from Fund I plus new Singapore/Malaysian families

Fund I Re-ups (HNWIs, angels) $5M (20%) Strong re-up rate demonstrates LP satisfaction

Fund-of-fund $4M (16%) Dubai Future District Fund, SEA-MENA-oriented allocators

Strategic / Corporate $2M (8%) Corporate VCs seeking regional deal flow

GP Commitment$1M (4%), Increased from Fund I to demonstrate alignment

Target LP count: 18-22 LPs

Average commitment: $1.1-1.4M

Minimum commitment: $250K (to maintain fund I relationships)

LP Value Add

Our LP base isn’t just capital—it’s a strategic network:

Jelawang Capital: Portfolio company introductions, co-investment on larger rounds, thought leadership association

Sarona: ESG framework guidance, impact measurement support, introductions to impact-focused follow-on investors

Fund I HNWIs (exited founders): Direct mentorship to portfolio founders, customer introductions, hiring network access

Dubai Future District Fund: Middle East expansion pathway for portfolio companies, sovereign wealth fund network

Corporate LPs: Strategic partnership and M&A optionality for portfolio companies

LP ECONOMICS

Financial Terms

Term     Fund II                Structure

Management Fee

2.0% on committed capital during investment period

2.0% on invested capital thereafter

Carried Interest 20%

Preferred Return (Hurdle) 8%

GP Commitment 4% ($1M)

Waterfall European (whole-fund)

Fund Life10 years + two 1-year extensions

Investment Period 4 years

Distribution Policy

Distributions made as exits occur, subject to:

Return of LP capital contributions first

8% preferred return to LPs

80/20 split thereafter (LP/GP)

GP catch-up provision after hurdle achieved

Fee Offsets

100% of transaction fees, monitoring fees, and director fees received by GPs from portfolio companies are offset against management fees.

LEGAL SETUP

Fund Domicile: Labuan International Business and Financial Centre (IBFC), Malaysia

Fund Structure: Labuan Limited Partnership

Rationale for Labuan:

Tax-efficient structure for regional investments

Regulatory framework designed for investment funds

Lower setup and administration costs than Singapore VCC or Cayman

Acceptable to institutional LPs including DFIs

Geographic alignment with our KL base

Fund Administrator: Apex Fund Services (Singapore)

Legal Counsel:

Fund formation: Rajah & Tann (Singapore/Malaysia)

Portfolio investments: Local counsel in each jurisdiction

Auditor: Ernst & Young (Malaysia)

Tax Considerations:

Labuan entities benefit from 3% tax on net profits or flat RM20,000

No withholding tax on distributions to non-Malaysian LPs

Tax treaties in place with most LP jurisdictions

DEALFLOW

Primary Dealflow Channels

1. Founder Networks (40% of pipeline)

Rizal’s operator background generates direct founder referrals. Portfolio company founders introduce their peers. Our reputation for being “founder-friendly” creates inbound interest from founders who’ve heard about us through the ecosystem.

2. Ecosystem Partners (30% of pipeline)

Deep relationships with Cradle Fund (Malaysia), MDEC, 500 Startups (SEA), Antler, and regional accelerators. We’re the preferred follow-on investor for several accelerator programs because we move quickly and add operational value.

3. Angel/Syndicate Networks (20% of pipeline)

Co-invest relationships with AngelCentral Malaysia, Angel Investment Network Indonesia, and individual super-angels across the region. Angels bring us deals early; we bring them access to institutional rounds.

4. Proactive Sourcing (10% of pipeline)

Associates systematically track companies emerging from regional tech hubs, monitor funding announcements, and conduct outbound outreach to promising founders.

Dealflow Expansion Strategy

For Fund II, we’re expanding dealflow through:

Quarterly “Office Hours” in Jakarta, Ho Chi Minh City, and Manila

Content marketing (Aisha’s LinkedIn presence reaches 15,000+ regional followers)

Deeper accelerator relationships in Vietnam and Philippines (underserved in Fund I)

Investment Process

Stage                   Timeline                         Activities

Initial Screen                                                                                                         1 week

Partner review of deck/intro, quick pass/proceed decision First Meeting           1-2 weeks

60-minute founder meeting, both GPs attend, Deep Dive, Term sheet 1            1-3 weeks

Market analysis, reference calls, product review, Investment Committee           1 week

IC memo, partner discussion, decision, Term Sheet 2 & Close                        1-4 weeks

Final terms negotiation, legal documentation, funding                                       1-4 weeks

Total process: 2-14 weeks from first meeting to close

Decision authority: Both GPs must approve; no solo deals

PORTFOLIO & VALUE ADD

Portfolio Construction Parameter

Target Number of investments 18-22 companies

Initial check size $500K-$1.5M

Follow-on reserves 35% of fund ($8.75M)

Target ownership 8-15% at entry

Concentration limit

No single investment >12% of fund

Follow-on Strategy

We reserve 35% of the fund for follow-on investments in winners. Follow-on decisions are made based on:

Company performance against milestones

Ability to maintain meaningful ownership

Quality of incoming investors

Risk/reward at new valuation

We explicitly do NOT do pro-rata follow-ons across the portfolio. Capital is concentrated in top performers. Fund I experience: followed on in 3 of 12 companies; those 3 represent 60% of portfolio value.

Investment Decision Framework

All investments must meet threshold criteria:

Team: Technical depth + commercial potential (or willingness to add commercial talent)

Market: $500M+ addressable market in ASEAN

Timing: Clear catalyst for why now

Fit: B2B/fintech focus aligned with thesis

Valuation: Entry price supporting 10x+ return potential

Value Add: How We Support Portfolio Companies

Board Engagement

GPs take board seats on all lead investments. Active participation in strategy, hiring, and fundraising decisions. Monthly check-ins with all portfolio CEOs.

GTM Support (Andrew Senduk)

Hands-on work with portfolio companies on:

Sales process design and optimization

Pricing and packaging strategy

Enterprise sales playbook development

Regional expansion planning

Customer success frameworks

Andrew engages with 6-8 companies per fund on structured GTM programs.

Talent Network

Curated network of 200+ executives and operators across ASEAN. Direct introductions for key hires. Quarterly portfolio talent events connecting companies with candidates.

Follow-on Fundraising

Warm introductions to Series A investors (Sequoia SEA, Vertex, East Ventures, Openspace, etc.). Preparation support for institutional fundraising. Data room and pitch coaching.

Peer Network

Quarterly portfolio CEO dinners. Slack community for real-time peer support. Annual offsite bringing together all portfolio founders.

EXIT STRATEGY

Value Creation & Exit Strategy

Value Creation Focus Areas:

During Years 1-3 (building phase):

Product-market fit validation

Initial revenue traction ($100K-$500K ARR)

Team building beyond founders

Market positioning establishment

During Years 3-5 (scaling phase):

Revenue acceleration ($500K-$3M ARR)

Unit economics optimization

Geographic expansion within ASEAN

Series A/B fundraising

During Years 5-8 (exit preparation):

Path to profitability or clear growth trajectory

Strategic relationship cultivation

Board composition optimization for exit

Financial and legal housekeeping

Exit Pathways:

Exit Type            Expected % of Exits Typical Timeline

Strategic M&A (regional) 20%              Years 4-7

Strategic M&A (global)        5%             Years 5-8

Secondary sale                     10%           Years 4-6

IPO (rare at our stage)          5%            Years 7-10

Write-off                            60%              Years 2-8

Exit Preparation Process:

Starting Year 2, we work with portfolio companies to:

Identify potential strategic acquirers

Build relationships with corporate development teams

Prepare management for M&A processes

Clean up cap table and legal structure

Develop exit-ready financial reporting

Exit Experience

GP Exit Track Record:

Aisha Rahman:

4 exits at prior fund, including 2 M&A transactions she led

Managed LP distributions and exit accounting

Board member through 3 acquisition processes

Rizal Tan:

Founded and sold B2B marketplace to strategic acquirer

Personal angel portfolio: 2 exits (1 acquisition, 1 secondary)

Operator perspective on founder exit psychology

Fund I Exits (to date):

SecureKL: Acquired for $2M (1.38x return)—managed full M&A process

DataSync: Orderly wind-down with capital return—demonstrated discipline

AgriTech ASEAN: Wind-down in progress

FUND ECONOMICS

Fund Model Summary

Item     Amount

Fund Size $25,000,000

Management Fee (annual, investment period) $500,000

Management Fee (annual, post-investment period) $400,000 (on invested capital)

Total Management Fees (10-year life) $4,400,000

Available for Investment $20,600,000

Target Gross Multiple 3.0x

Target Net Multiple2.5x

Target Net IRR20%+

Management Company Economics

Annual management fee of $500K supports:

2 GP salaries (market-rate for regional VCs)

2 Associate salaries

1 Operations Manager salary

Office (KL headquarters + hot desks in SG, Jakarta)

Travel (significant—we’re on the ground across 4 countries)

Fund administration, legal, audit

LP relations and reporting

Cash Flow Reality:

Unlike Fund I (where we paid ourselves poverty wages), Fund II economics allow for sustainable GP compensation. This is critical for partnership stability and long-term firm building.

Carried Interest Distribution

Assuming 3.0x gross return ($75M exit proceeds) on $25M fund:

Distribution     Amount

Return of LP Capital  $25,000,000

8% Preferred Return to LPs $8,000,000

Remaining Proceeds $42,000,000

LP Share (80%)$33,600,000

GP Carried Interest (20%)$8,400,000

Total LP Returns: $66.6M on $25M invested (2.66x net)

GP Economics: $8.4M carried interest + ~$4.4M management fees over fund life

Working Capital

Fund II includes a modest working capital facility to bridge timing gaps between capital calls and expenses. This prevents the personal financial stress that characterized Fund I operations.

Structuring a series A with four co-investors, what are the return profile on this deal?

SUMMARY: WHY FUND II WILL SUCCEED

Meridian Ventures Fund II is positioned to deliver top-quartile returns because:

Proven Team: GPs with complementary skills, demonstrated partnership stability through Fund I challenges, and relevant operating experience.

Differentiated Strategy: Ground-level presence in underserved markets, combined with genuine GTM value-add through Andrew Senduk.

Strong Fund I Foundation: 1.55x TVPI with clear winners emerging, disciplined write-off decisions, and institutional-quality reporting already in place.

Right-Sized Fund: $25M is large enough to lead meaningful rounds but small enough to generate strong returns from regional exit valuations.

Institutional LP Base: Anchor commitments from Jelawang and Sarona provide validation and strategic value beyond capital.

Clear Path to Fund III: Fund II performance sets up institutional fundraise at $50M+, accessing DFI capital and achieving sustainable firm economics.

Fund II isn’t just an investment vehicle—it’s the foundation for building a permanent institution in South-East Asian venture capital.

Fund II Fundraising Begins

By mid-Year 3, we formally launched Fund II fundraising with a $25M target—2.5x our Fund I size.

The LP composition evolved significantly from Fund I:

LP Type Commitment

Jelawang Capital (anchor) $4M

Sarona Asset Management $3M

Dubai Future District Fund $2.5M

Speedinvest Emerging Manager Program $2M

Regional Fund-of-Funds (2) $5M

Fund I Re-ups (Family Offices, HNWIs) $6M

New HNWIs and Angels $2.5M

TOTAL $25M

Jelawang Capital: A Thought Leader Partnership

Among our Fund II LPs, Jelawang Capital stood out not just for their commitment size but for their role in the ecosystem.

Jelawang had established themselves as thought leaders in South-East Asian venture, publishing research on emerging manager performance, hosting convenings for GPs and LPs, and advocating for ecosystem development across the region.

Their due diligence process was rigorous—more intensive than any other LP we’d encountered. But that rigor came with genuine partnership. Once they committed, they became active supporters of our firm, making introductions to other LPs, providing feedback on our portfolio strategy, and including us in their thought leadership events.

“Having Jelawang as an anchor LP gave us credibility that we couldn’t have purchased at any price,” Rizal later reflected. “When other LPs saw that Jelawang had done deep due diligence and committed, it reduced their perceived risk in backing us.”

Fund II closed in 14 months—4 months faster than Fund I. The difference was our systematic fundraising approach. We had LP coverage across every major category. We had materials ready. We had a process. We weren’t scrambling; we were executing.

Fund II announced at SuperReturn Asia

Year 5: Fund II Deployment and Fund I Value Creation

Fund II First Investments:

With $25M to deploy, Fund II allowed us to write larger checks ($500K-$1.5M) and target slightly later-stage opportunities (seed+ to Series A).

Fund II investments (Year 5):

•            Investment #1-3: Three seed rounds averaging $800K

•            Investment #4-5: Two Series A participations averaging $1.2M

•            Total deployed Year 5: $5.2M (21% of fund)

Fund I Portfolio Events:

PayMalaysia closes Series A (October, Year 5): $5M round led by Jungle Ventures, a top-tier regional VC. Our follow-on: $200K to partially maintain position. PayMalaysia was now valued at $18M; our position worth approximately $3.5M on $650K invested (5.4x).

SecureKL acquired (November, Year 5): In a surprise development, SecureKL was acquired by a regional cybersecurity company for $2M. Our $400K investment returned $550K—a modest positive outcome (1.38x) after years of struggle. First actual exit and DPI generation!

AgriTech ASEAN shuts down (December, Year 5): After 3+ years with no commercial traction, AgriTech’s board and founders decided to wind down the company. Our $350K investment returned approximately $50K from remaining cash. Second complete write-off.

Year 5 Fund I Metrics:

• Total invested: $5.2M (75% of initial allocation)

• Current portfolio value: $11.5M

• Distributions (DPI): $600K (SecureKL exit + DataSync wind-down + AgriTech wind-down)

• TVPI: 2.15x

• DPI: 0.12x

• Net IRR: ~26%

Key Takeaways from Part II

For fund managers in their investment period:

1. The J-curve is real and painful. Years 2-5 will feel like failure even when you’re building a successful portfolio. Communicate this to your LPs early and often.

2. Portfolio mortality is normal. Expect 30-80% of seed investments to fail completely. The key is limiting exposure to losers while maximizing exposure to winners.

3. Follow-on decisions define returns. Our Fund I returns were driven by concentrated follow-on in PayMalaysia and FinFlow. Spray-and-pray follow-on destroys returns.

4. First exit matters more than its size. SecureKL’s 1.38x return was modest, but generating actual DPI established our credibility for Fund II.

5. Build your fundraising team before Fund II. Use the GP Fundraising Team canvas to systematically cover all eight roles, even with a small team.

6. Fund II timing is strategic. Starting Fund II in Year 3-5, before Fund I exits, is standard practice. LPs understand the cycle.

Grace Choo’s final perspective on Part II:

“By Year 5, I’d moved from cautious optimism to genuine confidence in Meridian. They’d made hard decisions, communicated transparently, and generated reasonable paper returns. More importantly, they’d maintained partnership stability through challenging years. Fund II felt like a natural evolution, not a leap of faith. I told them we’d be interested in exploring a Fund III commitment if they could reach $50M.”

Read part III: Value Creation, Fund III, and Institutional Arrival (Years 6-7).

If you have not already read it, check out part I, the early years.

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