Tools Archives - Engage//Innovate

Taking Scale Up! to Market

Scale Up! is a powerful tool for building entrepreneurial skills, supporting founders, angels, investors and ecosystem builders. Globally, 6.000+ have been through Scale Up! But, as a new Scale Up! Facilitator and Partner, how do you actually take Scale Up! to market? In this article, we explore elven proven ways to bring Scale Up! to your market.

By Chris Rangen, Sanjana Rehaja & Stuart Morley

Congratulations, you have gotten trained, certified on Scale Up! Or, maybe you want to support the ecosystem by taking Scale Up! into your part of the world. Maybe you are ready to bring Scale Up Africa Rising! Into the African ecosystem? Or Scale Up MENA! into the MENA ecosystem? or maybe ready to bring Scale Up Europe! into the European ecosystem?

But how, exactly, do you start on taking Scale Up! to market? What are the first steps and what are the best ways?

Before tactics, partnerships, or pilots, there is one uncomfortable truth: Scale Up! does not spread because it is good. It spreads because someone decides to take personal ownership for bringing it into their market.

In every ecosystem where Scale Up! has taken root, there has been at least one individual who stopped waiting for inbound, funding, or perfect conditions—and instead acted with full accountability for the outcome.

This mindset shift matters. Because the early phase of taking Scale Up! to market is not an institutional motion; it is an entrepreneurial one. You are not “rolling out a program.” You are compounding credibility, relationships, and proof—one decision, one session, one conversation at a time.

If you are looking for certainty before you act, you will wait too long. If you are willing to act before certainty, the market starts to respond.

In our experience, working with global partners across 50 countries, these are the nine most common ways to bring Scale Up! to market.

Who attends Scale Up? Nor sure who your target participants are? Check out this article first.

Note, this article discuss how to take Scale Up! into a new market. Once you are in the market, once you have run your first 5-6 paid programs, the dynamics changes a bit.

Scale Up! is now available in Scale Up! (Global), Scale Up Angel!, Scale Up X!, Scale Up MENA!, Scale Up Africa Rising!, Scale Up Europe! and Scale Up Nordics! In this article we use the term ‘Scale Up!’ covering all or any of these.

Who buys Scale Up!? Not sure who the buyers are? Check out this article first.

Before we start… What’s your level of Scale Up! expertise?

Running Scale Up! is challenging. It’s technical. It requires you to do cap table math in your head, explain 3x liquidation preference and convert five stacked SAFE notes with different terms, while at the same time you need to teach the Founder’s Journey, explain long-term funding strategies and share personal experiences from scaling a high-growth tech startup.

If you are planning to run Scale Up!, you should have a meaningful amount of experience across the startup ecosystem, as an operator, founder, investor, program manger or startup mentor.

Your expertise should cover two domains; domain knowledge about all things startup growth and facilitation knowledge, to run complex groups. If you don’t have sufficient depth in both domain areas, bring one or more partners to work with you.

Alone -or in groups? Anyone can run Scale Up! by themselves, but that does not mean you should. We have much more fun, we learn more and it usually becomes a better experience for everyone if you have a team with you. Two people work well, three or even four people is absolutely a possibility. You decide.

Faculty, mentor, early-stage investor, global Scale Up! Expert, Few can match the expertise level of Scott B. Newton.

The eleven Ways to Bring Scale Up! to market

Existing clients
Existing relationships
Domain expert
The first one is free
Engaging the ecosystem
The targeted approach
The mapping approach
Find the problem-owner approach
The hard work approach
Scale Up! GTM Workflow
Being active, waiting for random luck

1. Existing clients

The fastest way to get Scale Up! into the market is simple. Work with already existing clients. They trust you. You have a relationship. You already have ongoing work. All you have to do is plug Scale Up! into a workshop or a program you are already running. There is no sales process, no discussions around budget because you already have a contract or collaboration you are working off of.

When Rick first got his hands on Scale Up! back in 2019, it was pretty easy for him to bring Scale Up! into his classroom in Silicon Valley. He was already teaching. This would fit perfectly into one of his already planned classes.

If you have pre-existing clients, projects, programs or classes, bringing Scale Up! into your market is an obvious quick fix. If that option is available to you, go for it.

Rick, our #1 Scale Up faculty, bringing Scale Up! from Europe to the Valley

2. Existing relationships

With existing relationships you already know your buyer. Maybe you’ve worked together in the past. Maybe she is a for former client. Maybe he just transitioned into a new role in the startup ecosystem. Reaching out to existing relationships will usually lead to a fast uptake of Scale Up! They know you, trust you and are – usually – willing to follow your recommendations.

When Michael first saw Scale Up! in Norway, during the Master Trainer program, he knew exactly who he needed to bring this to. In an instant, he knew the buyers, the pain points and how much they would love seeing Scale Up! in Canada. With strong, pre-existing relationships, Michael could easily and without much delay bring

A useful filter for “existing relationships” is this question: Who already trusts your judgement when you say, “This matters—now”?

In practice, early Scale Up! adoption rarely comes from cold outreach. It comes from people who have already seen you operate under pressure, solve real problems, or lead through ambiguity.

When you frame Scale Up! not as a product, but as the next logical move for their founders, investors, or portfolio, decision-making accelerates. You are not selling; you are guiding.

Trust collapses sales cycles. Credibility compounds adoption.

3. Domain expert

A domain expert is already recognized as an expert in this field. You are possibly business school faculty teaching entrepreneurial finance or startup ventures. Maybe you are the founder of the leading accelerator in your region, or head of investments at a pre-seed VC fund.

In your role, people recognize you as an expert; when you bring Scale Up! into the market, there is only a short path for you to find your buyers and sponsors. It might even happen within your own university or your own startup programs.

First time Mohammed saw Scale Up MENA!, he knew he had to bring it back to his ecosystem in the Middle East. “Can I take this with me?”, was one of his first questions; and he did. As a domain expert, there are usually multiple programs to explore for bringing Scale Up! into the ecosystem.

Being a domain expert is not only about credentials—it is about pattern recognition. Founders, investors, and ecosystem leaders listen to people who can clearly articulate:

What most startups get wrong
Why those mistakes repeat
And what disciplined alternatives actually look like

Scale Up! gives domain experts a structured way to translate lived experience into repeatable learning. When positioned correctly, the program becomes an extension of your professional identity—not an add-on offering.

This is where authority turns into leverage.

Mohammed, Rumbi, Chris working with Falak Startups & the Egyptian ecosystem

4. The first one is free (or, a lot of free pilots)

With the first one is free, you bypass the traditional client and buyer profile. Instead, you go directly to the ecosystem. You engage with founders, not gatekeepers. Following ‘the first one is free’, you run a large number of pilot sessions, free to attend, free for everyone. These are unlikely to be full, multi-day Masterclasses, but they are significant enough that startup founders, angels, investors and ecosystem builders get a sufficient taste for Scale Up!; and get a chance to realize the value and benefits of Scale Up! Of course, your skills with Scale Up! need to be decent, or at least rapidly improving.

‘’WOW! Every startup should learn this”, said Costa Rican tech founder Juan Carlos Marti, of Remora XYZ, after attending a free pilot Scale Up! workshop in Oslo, in early 2019.

In total, as we have been rolling out Scale Up!, we have probably delivered 50+ free, unpaid Scale Up! sessions, maybe more. Test sessions, pilots, free Train-the-trainers, discovery sessions; they all serve the same goal, get many more people to try out Scale Up! – and then ask for more, spread the word and help take this into programs and buyer connections.

A dual bonus with ‘the first one is free’ is obviously, you get a lot of practice. From rapid-fire introductions to explaining tricky term sheets for the 12th time; free pilots double as your training ground. Make use of it!

Importantly, going to market with ‘the first one is free’ requires a few more steps to be successful.

“Free” only works when it is intentional.

The purpose of early free pilots is not generosity—it is momentum. Each session is a compounding asset:

Your facilitation sharpens
Your language tightens
Your confidence increases
Your reputation spreads

The facilitators who succeed treat every pilot as if it will be quoted, referenced, and remembered—because eventually, it will be.

The goal is not volume alone. The goal is belief transfer: when participants leave convinced that Scale Up! is something their ecosystem cannot afford to ignore.

Capture, capture, capture

Use this to get photos, quotes, comments, feedback. Write blogposts. Write case studies or even mini-cases. Capture quotes. Capture learnings.

2. Ask for referrals, introduction and ‘where should we take this’?

When running free pilot sessions, carve out at least 15. Minutes at the end to ask for ‘where should we take this?’, and ‘is there any program you’d like to see us run this in?’ or ‘is there anyone you know we should talk to’.

3. Follow-up

Immediately after, reach out to the new contacts and referrals. Be disciplined about reaching out to everyone while this thing is still warm. 24 hours, 48 hours tops. Be active, reach out and follow-up.

Going to market with ‘the first one is free’ can be a great way to break into a new market, and you can reach a lot of startup founders early on, helping you build momentum and a following around your work with Scale Up! Expert facilitator Enrico recommends 20 or more sessions in the first year to build your facilitator mastery; that’s easily achieved with this approach.

5. Engaging the ecosystem

Engaging the ecosystem is a tricky way to get to market. Often, it entails many conversations. Many loose meetings. Many coffee conversations. We have seen this approach take up a lot of time, but yielding little results.

With ‘engaging the ecosystem’, you go out and have a large number of conversations. That’s a good thing, but we find that these conversations sometimes lack a plan, a structure and a clear go-to-market workflow. Engaging the ecosystem can lead to great insights from local accelerators, wonderful discussions with key team member at the innovation agency and great conversations with founders. But that all comes to naught if there is no clear distinction between champions, buyers and sponsors.

Many people, first time exploring their local markets for Scale Up! end up, almost accidentally, ‘engaging the ecosystem’, and it kind of stops there. Don’t be that person.

Ecosystems do not move because they are informed. They move because someone takes responsibility for alignment.

“Engaging the ecosystem” fails when conversations remain polite but non-committal. Progress happens when you deliberately classify people into:

Champions (who advocate)
Buyers (who decide)
Sponsors (who fund or legitimize)

If every meeting does not move one of these three closer to action, you are networking—not building a market.

Engaging the ecosystem, Digital Switzerland, 2019

6. The targeted approach

In your ecosystem, find one of the top three ecosystem players, be it an accelerator, incubator, business school, innovation agency or economic development agency.

Reach out to them with a clear understanding of the current challenges and problems they are working on. Position Scale Up! to be a part of their solutions roadmap. Partner closely with one or more of these top three ecosystem players.

Build (Scale Up!) programs that are designed around their strategies, their mission and their key performance metrics. Go to market in close, close partnership with one of these three. Using this approach, you can easily end up working ‘under’ your client, with the program becoming theirs, not yours.

Be aware of this and collaborate constructively on joint communications, case studies and post-program learning.

When Marcus first brought Scale Up! to Japan, he knew exactly which conference he wanted to partner with for the first-ever Scale Up! Masterclass in Japan.

Scale Up! goes to Japan, highly targeted

7. The mapping approach

Like the name implies, the mapping approach requires a deep insight and understanding of your local market.

You need to spend time to appreciate the key challenges, the struggles and setbacks local founders experience. You are likely a recognized mentor, startup coach. You have access to founders; you spend time with founders. You know the market and the ecosystem in detail.

With this foundation, you spend time, using any tool, to map out and clearly segment, structure and identify the market. once you have a crystal-clear market map, and only then, do you engage with the top stakeholders.

Always, starting from a position of understanding the challenges and how your Scale Up! programs can solve them.

ST partners at work in MENA, with Sanjana,

8. Find the problem-owner approach

Every ecosystem has challenges, problems and gaps between ambition and reality. If you can find, connect and address the owners of these problems, you might find a very short path to a positive outcome.

What are the key problems the ecosystem has?

Who feels them? (often, startup founders, ecosystem builders)

Who owns them, and are responsible to get them solved?

Who lies awake at night, thinking about how to solve these?

Use your toolkit and network. Ask and listen. Do your research. But map out and find the problem-owner. Connect with high-quality content. Be relevant. Be helpful. Be understanding. Be empathic to the problems. Be clear on the solution. You might find this to be a good path to solving real client problems and also bringing Scale Up! to market.

9. The hard work approach

Like the name indicates, our next approach takes …. a …. lot … of work. Here are the steps we have identified.

A. Map the market

B. Define the problem-statement

C. Define the problem-solution

D. Build your domain expertise

E. Learn case studies from the ecosystems (study top companies and investors)

F. Revisit the problem-solution

G. Nail your solution-statement

H. Run three free pilots (small, short)

I. Capture video, photos, quotes and testimonials. Get references and referrals

J. Build your skills

K. Identify GTM partners

L. Identify target participants

M. Test your value proposition

N. Engage with your Champions, Buyers and Sponsors

O. Run three more pilot sessions

P. Capture video, photos, quotes and testimonials. Get references and referrals

Q. Write three case studies and blog posts from your sessions and insights to date Capture different angles, focus on the problem-solution narrative. Focus on outcomes.

R. Identify your Champions, Buyers and Sponsors (three ICP)

S. With the case studies, go back to your buyers, verify the problem-solution-value proposition. Focus on how Scale Up! can help the ecosystem and your buyers

T. Secure 2-3 paid pilots

U. Run pilots

V. Capture video, photos, quotes and testimonials. Get references and referrals

W. Write 2-3 case studies from pilots and evolution so far

X. Write 2-3 content expert pieces. Publish in different channels

Y. Launch a dedicated website, possibly a sub-page, focus 100% on the problem-solution-value proposition. Develop the page with Bolt, Gamma or Lovable, but write it with a Problem-Solution framing

Z. Use your video, photos, quotes and testimonials.

AA. Engage with the next set of Champions, Buyers and Sponsors

BB. Secure next 20 paid programs and Masterclasses

CC. Scale from there

DD. Become a widely recognized domain expert

That’s all. but, seriously, the ‘hard work approach’ is built around a few key steps.

– Start small, pilot and ramp up

– Focus on the problem-solution, every step

– Run pilots, but make sure to capture everything

– Communications, communications and communications

Run many programs, develop, become an absolute expert over time

This approach is not for everyone. It requires a long-term mindset. It requires dedicated. But most of all, it simply requires a lot of hard work.

The hard work approach succeeds for one reason: it rewards consistency over intensity.

No single workshop changes a market. No single partnership creates credibility. No single post generates sustained demand.

What does work is disciplined repetition—showing up, delivering value, capturing proof, and doing it again.

This is not a launch strategy. It is a leadership practice.

10. Scale Up! GTM Workflow

Over the past few months we have been exploring the topic of Scale Up! go-to-market, in-depth. “How can we get more full-sized Scale Up! Masterclasses, in successful collaboration with our global partners?”

We had building blocks, elements, but not the entire go-to-market playbook. So, we developed it. For Strategy Tools Partners and certified Scale Up! expert facilitators, we share the entire, 18-step, GTM workflow.

ST Community GTM workflow. Join us to unpack this together.

Not yet partner or expert facilitator? Explore how you can partner with Strategy Tools.

11. Being active, waiting for random luck

Eleventh and last, we wait for luck. If you are already using Scale Up! in one market, you can run it here, across education, accelerators, ecosystem development. You use social media well. Run a great IG account. Write great content on LinkedIn, and suddenly your inbox pings. “Hey, can you come and run….”, from a brand new market. It happens. It’s happened to us more than once. You just need to be active – in some markets – and then wait for luck to strike. It happens.

Time to get started

If this all feels familiar, it should.

Taking Scale Up! to market follows the same logic founders face when going from zero to one:

There is ambiguity
There is resistance
There is no shortcut to credibility

But there is also upside. When done well, you are not just running programs—you are shaping how an ecosystem thinks about growth, capital, and decision-making.

And that impact compounds long after the first cohort ends.

Late stage founders, hard at work, Scale Up MENA!, Dubai 2025

If you are a certified Scale Up! facilitator, you fully understand the early stages of 0-1, of early product-market fit, of nailing your ICPs, your channels, your value proposition. It’s the same here.

You are, in some respect, a founder with a new product in a new market. How you go to market, matters, a lot.

Hopefully, this article has helped shed light on some of your future options, on how you can take the Scale Up! series to market in your region – and hopefully build a sustainable, lasting business, while also driving development of the ecosystem.

After all, that’s why we developed Scale Up! in the first place, to better develop the entrepreneurial ecosystem and help more founders scale.

Want to learn more about the Scale Up! series? Check out ST.io

Interested to join the global partner community? Visit our Partner page.

Curious to bring Scale Up! to your ecosystem? Get in touch today, Chris@strategytools.io

April 13, 2026/0 Comments/by Christian Rangen

Insights, Startups, Tools

Startup Founder? 15 Steps to Upgrade Your Deck.

We have just finished reviewing a large number of startup pitch decks. Founders from across the ecosystem, at various stages, preparing for fundraising. Some early-stage, some early growth-stage. Some first-time founders, others serial entrepreneurs.

It was a revealing exercise.

There is a lot of raw founder talent out there. Real problems being solved. Genuine ambition on display. And yet, deck after deck, we kept seeing a pattern of missed opportunities. The same structural gaps. The same underselling of genuinely strong companies.

So we wrote it all down.

What follows are 15 firm, honest, and we hope — useful — recommendations for any founder currently building or upgrading their pitch deck. These are not abstract principles. They come directly from what we saw, and what we know many investors look for.

Take them seriously. Your deck is often the first impression. Make it count.

1. Don’t build tiny companies.

This may sound blunt, but it needs to be said. If your deck describes a business that will generate $2M in revenue and employ 12 people, you are not describing a venture-backable company. You may be describing a fine business. But not a venture-backable one. Investors are not looking for small. They are looking for transformational. Before you write a single slide, ask yourself honestly: are we building something genuinely big?

2. Do build scalable, high-growth companies.

The corollary to point one is this: build for scale from day one. That means a business model that can grow without linear cost increases. A product that can reach new markets without rebuilding from scratch. A team that can scale with the company. When you sit down to work on your deck, ask: where does the hockey stick come from? If you cannot answer that clearly, the deck is not ready.

3. Know which deck you are building.

There is not one pitch deck. There are several. The teaser deck. The investor deck. The demo day deck. The full due diligence deck. Each has a different purpose, a different length, a different level of detail. We see founders send a 40-slide full due diligence deck as their first outreach. We see others send a 6-slide teaser when they are already in detailed conversations. Know your audience. Know your moment. Build the right deck for the right context.

4. Don’t waste prime real estate.

Every slide has a headline. Most founders waste it. Instead of writing “Market Size”, write: “The European SaaS market is €48B and growing at 22% annually.” Instead of “Team”, write: “We are the most qualified team in Europe to solve this problem.” The slide headline is your most valuable real estate on the page. Use it to make a point, not label a category.

A practical habit: write the slide type — Team, Market, Ask, Traction — in the upper right corner of the slide. Then use the headline to deliver the key message. Every. Single. Slide.

5. Be more ambitious.

We say this with respect, because we know how hard the founder journey is. But time and again, we see founders undersell themselves, their markets and their vision. The TAM is presented conservatively. The projections are modest. The ambition is hedged. Investors fund ambition. They fund founders who believe they can change an industry. Your deck should reflect that belief. If you don’t believe it, work on that first. If you do believe it, let it show.

6. Make your roadmap longer than 24 months.

A 12 or 18-month roadmap is not a vision. It is a project plan. Investors are thinking about 5-15 year return cycles. They need to see where you are going, not just what you are doing next quarter. Build a roadmap that goes beyond 24 months. Show the milestones, the market expansion, the product evolution, the team build-out. A longer roadmap signals strategic thinking. It shows you understand the journey ahead.

7. Share your funding plan alongside the roadmap.

The roadmap and the funding plan should live together. For each phase of growth, show what capital is required, what it will be used for, and what milestones it unlocks. This is not just good storytelling — it is good investor communication. It shows you understand the relationship between capital deployment and value creation. It makes the investment thesis clear. Roadmap without a funding plan is a wish list. Roadmap with a funding plan is a strategy.

8. Improve all things financials.

This is non-negotiable. Weak financial slides kill deals. If your revenue model is unclear, fix it. If your unit economics are missing, add them. If your projections have no logic behind them, rebuild them. Investors will stress-test your numbers. You need to know them cold, and the deck needs to show them clearly. This includes your burn rate, your path to profitability or next funding milestone, your key financial assumptions and your LTV/CAC ratios. Do the work. The numbers matter.

9. Focus on your top 3 selling points.

We see decks that try to say everything. They end up saying nothing. Identify the three most compelling reasons to invest in your company. Make those three points impossible to miss. Put them front and centre. Repeat them across the narrative arc of the deck. Everything else is supporting evidence. Investors remember three things. Make sure you choose which three.

10. Show your AI slide.

If you are building in 2026 and you do not have a clear AI story, you are leaving a major question mark in the investor’s mind. This does not mean adding “powered by AI” to a bullet point. It means showing how AI is structurally embedded in what you are building. For example: “We have built a unique end-to-end AI stack. Two people and ten agents work like a team of twenty would have done two years ago.” Show the leverage. Show the efficiency gain. Show the defensibility. Your AI strategy is now a core part of your investment thesis.

11. Add your own GTM slide — and make it count.

There are certain slides that should appear in every deck, yet we regularly see them missing or buried. Your deck must clearly address: your value proposition, your beachhead market, your go-to-market channels, your traction to date, and your early customer love. Do not assume investors will piece this together from context. Give each its own moment. A great customer quote, an early logo wall, a clear pipeline breakdown — these build confidence rapidly. These slides tell investors that you understand your business, your market, and your customer.

12. Address investor liquidity and exit — head on.

This is a sensitive topic. Some founders love talking about it. Some feel it is premature. Some worry it signals they want to exit early. Here is our view: the topic is too important to ignore, and ignoring it does not make it go away. Investors in your company have a fiduciary obligation to return capital. They need a credible path to liquidity. Show that you have thought about it. Present your exit strategy — whether that is an M&A pathway, a strategic acquirer, an IPO horizon, or a secondary transaction mechanism. You do not need to have all the answers. But you need to have the conversation.

Talk liquidity and exit from first investors coming in.

13. Show the round, the momentum and the closing strategy.

Your Ask slide is not just a number. It is a story of momentum. Who is already in? What are the terms? What is the timeline to close? What milestones will this round unlock? Strong rounds have social proof and urgency. Show that the round is moving. Show that serious people are already leaning in. If you have a lead investor, say so. If you have soft commitments, reference them. Investors want to join a round that is moving — not one that is stuck.

14. Show how you can build a venture-size, backable company.

This is the meta-question behind every investor review. Can this company return the fund? Is this a real venture opportunity? The entire deck, in a sense, is an answer to this question. But it is worth addressing it directly. Show your market scale. Show your margin structure at scale. Show your competitive position five years out. Show why this company — with this team, in this market, at this moment — can become something truly significant. That is what backable means. Make the case.

15. Focus on your top key metrics.

Founders often drown investors in data. More metrics do not equal more credibility. In fact, the opposite is often true: a founder who can identify and explain the three or four metrics that truly drive their business demonstrates a level of strategic clarity that inspires confidence. Pick your north star metric. Show its trajectory. Show what drives it. If you are pre-revenue, show the leading indicators that matter. If you are post-revenue, show ARR growth, NRR, CAC payback and gross margin. Know your numbers. Own your narrative.

A Final Word

The founders who raise successfully are not always the ones with the best product. They are often the ones who communicate their vision most clearly, who understand what investors need to see, and who treat the deck as a serious strategic document — not an afterthought.

Use this list. Work through it slide by slide. And go build something great.

April 9, 2026/0 Comments/by Christian Rangen

Insights, Startups, Tools

Entrepreneurial Finance Readiness Level

Entrepreneurial Finance Readiness Level (TRL, but for founders raising capital)

Most startups are familiar with the technical readiness of their product, commonly referred to as ‘TRL’ or Technology Readiness Level. But what about ‘investor readiness level’. What would a EFRL, Entrepreneurial Finance Readiness Level look like? Based on our work with 1000’s of founders across 1000’s of fundraising programs, processes and Masterclasses, we explore what a similar EFRL might look like.

Our key insight: very few founders around the world are actually ‘investor ready’. Much work remains in most ecosystems and the various ‘supporting infrastructures’ the ecosystems operate.

EFRL – Entrepreneurial Finance Readiness Level (Rangen, 2026)

How to read the EFRL

Level 0: not at all investor ready

Level 1-3: Not investor ready, but might still land some early-stage financing

Level 4-6: Investor ready, should be able to negotiate and secure investments at seed-to-Series A

Level 7-9: Fully investor ready. Should be able to raise capital into venture- and growth stages

Founders studying a record number of term sheets. Scale Up Europe! (angel) Masterclass, Cluj, Romania, March 2026

0. Below minimum

Not familiar with a basic cap table
Unable to manage a simple cap table exercise and update
Unable to read, understand and analyze a basic term sheet
Not familiar with how SAFEs, CLAs work
Not familiar with conversion into equity
Unable to structure two or more seed-stage funding rounds correctly
Lacking basic understanding of investor expectations and liquidity
Unable to articulate or discuss liquidity scenarios

Entry level term sheets from friends, family, angel networks and Speedinvest. Scale Up Europe!

1. Minimum

Understand the basics of a cap table
Understand the difference between company issuing equity and founders selling equity
Understand the basics of SAFE, CLA

2. Basic

Familiar with the basics of cap tables, including 2-3 updates and changes
Familiar with pre- and post-money valuations
Able to identify price per share and why it matters
Able to read and understand most entry-level term sheets
Able to read standard SAFE and CLA

3. Getting it

Comfortable with a basic term sheet, including standard provisions
Familiar with a basic shareholder agreement
Can follow a conversion process for SAFE, CLA into equity
Comfortable with cap tables, including doing 3-5 rounds of new equity raises in a cap table

Interesting term sheets from Global Ventures, Lightrock and World Fund. Scale Up Europe!

4. Entry level

Can spot good, bad and standard terms in a SAFE and CLA
Understand the basic idea of value creation and value uplift for investors and founde
Can set up and structure ESOPs correctly
Can set up and structure advisor shares, board shares,
Comfortable converting standard SAFE, CLA into equity, including correctly using caps, discounts and MFNs
Can read, structure and discuss term sheets from seed into series A/B

5. Competent

Very comfortable with cap table math
Able to spot ‘good’ and ‘bad’ term sheets easily, including excessive terms
Comfortable with most key terms in a term sheet
Can navigate most aspects of a SAFE or CLA instrument, including stacked conversions
Understand common shares vs. preference shares, and the long-term implications, including liquidation preferences, anti-dilution mechanisms and more
Understand investor expectations
Understand investor protection mechanisms
Understand the basics of investor liquidity and returns
Can structure 2-3 rounds ahead, and discuss entry-valuation, uplifts and return multiples

6. Qualified

Can develop a long-term capital strategy, including structuring 3-5 funding rounds, with clear 3X value uplift between each of them
Can easily manage a full cap table from start to exit, often across 5-12 equity rounds, including ESOPs, advisors, common and preference shares
Comfortable with all key terms in a term sheet, can spot and negotiate on the most critical ones
Comfortable structuring secondaries and basic partial liquidity solution

Evantic Capital, ICONIQ and Local Grlow (aka PCG), here representing later stage term sheets. Scale Up Europe!

7. Advanced

Can easily write up a full Outcome canvas, with outcome scenarios and outcomes math (less than 10. Minutes)
Can write and discuss a full investor memo
Can easily spot good/bad/standard terms in a term sheet in just seconds
Fully understand the long-term implications of various investor terms and protections

8. Expert

Able to easily discuss different liquidity strategies, exit scenarios, current market conditions, key value drivers and how to ensure optimal exit outcomes
Can easily spot errors, mistakes in cap tables
Fully understand how to structure a fundraising round based on investors’ timelines and return requirements

9. Pro

Able to quickly flesh out a ‘Fund returner’ math case in investor conversation

Late stage founders structuring multiple investor term sheets into Series C and D. Scale Up! Masterclass, Bergen, Norway, November 2025.

Summary

The idea of a EFRL is still forming. We hope this overview can be helpful to your work.

We explore this topic in-depth in the Scale Up! Masterclasses. Delivered globally, the Scale Up! Masterclasses allows founders, angels, investors, ecosystem developers and innovation agencies to master the founder’s journey, growth strategy, term sheets, investment instruments and cap tables in just a few days of work.

Scale Up Masterclasses Case Studies

Scaling to exit with Dubai Future District Fund

Read the full case study.

From Advisors to Growth Partners: How Norway’s Largest Bank DNB Elevates Startup Advisory with the Scale Up! Masterclass

Read the full case study.

Scaling up in the rising Egyptian ecosystem

Read the full case study.

March 29, 2026/0 Comments/by Christian Rangen

Insights, Startups, Tools

The Founder’s Web Summit Checklist: 10 Things You Need to Prepare

Hey, founders. If you’re heading to Web Summit — or any other major startup and investor conference — you probably need to prepare a little bit. That’s okay. That’s exactly why we put together this 10-item checklist.

A lot of founders zero in on the pitch deck, and yes, that matters. But as you’re about to see, there’s so much more you can do to show up ready. Here are the 10 things every founder needs before hitting the conference floor.

This article is part two in our three part-series helping startup founders prepare for major startup- and investor conferences. Read also part II and part III.

1. Your 30-Second Pitch

Know it cold. Short, concise, sharp — and ending with a very clear call to action. You’ll deliver this dozens of times in hallways, at the coffee bar, and in elevator banks. It needs to roll off your tongue effortlessly, sound natural, and leave the other person knowing exactly what you do and what you want from them

Practice makes perfect. Just remember that key question at the end to draw your audience in.

2. Be Curious

The best founders at conferences aren’t the ones pitching the hardest. They’re the ones asking the best questions. Go in genuinely curious about the people you meet — their thesis, their portfolio, their thinking. Curiosity builds rapport faster than any pitch. And investors remember the founders who made them think.

3. Your One-Pager — Easy to Share

A clean, single-page summary of your company — problem, solution, traction, team, and ask. Make it visually sharp and scannable in under 60 seconds. And make it frictionless to share: one link, mobile-friendly, always ready to send before the conversation ends.

4. Know Your Numbers Cold

Know your metrics by heart. Revenue, growth rate, burn, runway, unit economics — whatever drives your business. Nothing kills momentum in a great conversation like fumbling for your stats. If you have to check your phone for your MRR, you’re not ready.

Know your numbers. Maybe more important than your deck.

5. Your Pitch Deck, Financial Model, and Key Financials

Have your full deck ready for sit-down meetings, a trimmed 5-slide version for quick follow-ups, and your financial model clean and accessible. Investors will ask. Be ready to share on the spot — a single link, not an email attachment chain.

6. Your Target Investor Profile

Know exactly who you’re looking for before you walk in the door. Stage, check size, sector focus, geography, value-add beyond capital. The founders who waste the least time are the ones with a clear ideal investor profile — and the self-discipline to stay focused on it.

7. Your Customer Pipeline — In Detail and Full Color

Your pipeline is proof. Have it ready: named accounts, stages, deal sizes, timeline to close. Investors love traction, and a detailed, credible customer pipeline tells a story your deck can’t. Know it well enough to walk someone through it in three minutes without notes.

8. Your Key Questions

Prepare the questions you want to ask — and make them good. Not “are you investing?” but thoughtful, specific questions that open real conversations. What does their ideal Series A look like? Who are their best portfolio companies and why? What do they wish founders asked them more? Good questions signal you’ve done the work.

9. Your Data Room

Have it built, organized, and ready to share with one link. Financials, cap table, legal docs, product overview, team bios. When an investor asks for it — and the good ones will ask fast — you want to send it within the hour. Delays signal unreadiness. Speed signals confidence.

10. Your Round, Timeline, Momentum, and a Clear Close

Know your round inside out: how much you’re raising, on what terms, what you’ve already closed, who’s in, and when you’re closing. Investors want to feel momentum — not desperation, but clear forward motion. Have a closing date and hold it. Urgency is a feature, not a pressure tactic.

The bottom line: Your pitch deck is just one piece of the puzzle. The founders who get the most out of conferences are the ones who do the work before they arrive. Use this checklist, show up prepared, and make every conversation count.

Good luck out there.

This article is the first in a three piece series to help founders prepare for key conferences. Part I: The Founder’s Web Summit Checklist: 10 Things You Need to Prepare. Read it here. Part II: Meeting the Investors? Here’s what they’ll ask. Read it here. Part III: Going to Web Summit? Here Are the 15 Questions You Need to Prepare For the Investors You Meet. Read it here.

March 27, 2026/0 Comments/by Christian Rangen

Insights, Startups, Tools

Meeting the Investors? Here’s what they’ll ask

Going to an investor conference this month? Here are the 15 questions you should know cold — to nail your conversations and leave a lasting impression.

This article is part two in our three part-series helping startup founders prepare for major startup- and investor conferences. Read part I and part III.

Investor conferences are not pitches. They are conversations. But make no mistake: in the 10 minutes you have with a partner over coffee or an principal at a cocktail table, you are being evaluated. The investors in the room have heard thousands of founders. They can smell preparation — and they can smell the lack of it just as fast.

The good news? The questions are largely predictable. Below are the 15 questions that come up again and again at early-stage investor conferences. Master these, and you walk in with confidence. Wing them, and you are luck to walk out with a polite “send me your deck” hanging in the air.

We’ve split them into three tiers — and then we’ll follow two founders, Jack and Jill, as they each work the room.

The 15 Questions Every Founder Must Know Cold

Part 1: The Easy Ones

These should roll off your tongue without hesitation. If you stumble here, the conversation is already over.

1. What’s your revenue? Know your current ARR or MRR, your growth rate month-over-month, and whether you’re pre-revenue. Be precise. “Around half a million” is not an answer. 50.000 MRR; growing 30% month-over-month is.

2. What does your team look like? Who are the co-founders, what’s their background, and why are they the right people to build this? Investors bet on teams first. Have a crisp, confident answer.

3. How many customers do you have? Total customers, paying customers, and ideally your logo mix. If you’re B2B, name a few if you can. Numbers here signal traction — or the absence of it. Add in conversion rates to spice up the conversation.

4. What’s your business model? How do you make money? Subscription, usage-based, transactional, licensing? Keep it simple. If your business model requires a slide to explain, practice explaining it without one.

5. What stage are you at? Pre-seed, seed, Series A? How much have you raised, from whom, and what did you accomplish with it? Set the context clearly before anything else.

Part 2: Intermediate Level

These separate the prepared founders from the casual ones. Investors use these to gauge how commercially sharp you are.

6. What’s your (funding) timeline? When are you planning to close? Are you actively raising right now, or exploring? Investors need to know if there’s urgency — and whether their timeline can match yours.

7. Do you have a lead? If you’re approaching a seed or Series A, investors want to know who is anchoring the round. If you don’t have a lead yet, have a clear answer about who you’re in conversation with and what your lead criteria look like.

8. What are your key unit economics? CAC, LTV, LTV:CAC ratio, payback period. Know these numbers cold. If you’re early and don’t have statistically significant data yet, say so — but explain what signals you’re seeing and what you expect them to mature into.

9. Walk me through your top metrics. Beyond unit economics: churn, NRR, DAU/MAU, GMV, fill rate — whatever is most relevant to your business. Know your north star metric, and know why it’s the right one to track.

10. What does your cap table look like? Who owns what? Are there any messy early structures, convertible notes piling up, or SAFEs that will create issues at a priced round? Clean cap tables signal clean thinking.

Peak conference season, and every investor is looking for hot deals and raw data points. First step: Talk to founders.

Part 3: Advanced Questions

These are the questions that sort the truly prepared founders from everyone else. Nail these, and you’ll be remembered.

11. How much capital do you need — fully funded? Investors often think in terms of the full journey, not just the current round. How much total capital will it take to build a market-leading company? Walk them through the current raise and the longer-term capital roadmap. Don’t have the number? Go to work

12. Walk me through your economic scenarios — high case, mid case, low case. What probabilities do you put on each? This is where investors test your intellectual honesty. They want to see that you understand the range of outcomes, can articulate what drives each, and aren’t just pitching the dream scenario. Assign real probabilities. If you say 80% chance of the high case, they will push back hard.

13. What are you doing for early investor liquidity? Especially relevant at growth stage: are you thinking about secondaries, structured liquidity programs, or anything that allows early backers to realize some return before a full exit? This signals maturity and respect for your investor relationships.

14. What’s your exit strategy? IPO? Strategic acquisition? Are there natural acquirers in your space? Who has bought comparable companies, at what multiples, and when? You don’t need a fixed answer — but you need a thoughtful one.

15. Who else is in the round, and can we see their papers? Investors do diligence on each other. Who are your co-investors, what are the terms, and is the round structured in a way that works for all parties? Experienced investors will want to know they’re sitting alongside people they respect.

Bonus — The One That Catches Everyone Off Guard: “What’s the probability that you build a globally top-tier company in this space?” This is the hardest question of all. Not because you can’t answer it — but because answering it well requires both conviction and intellectual honesty in the same breath. We’ll see how Jack and Jill handle it below.

The Two Founders: Jack vs. Jill

To bring these questions to life, let’s follow two founders through the same investor conference. Both are raising a seed round. Both have interesting companies. But only one of them has done the work.

Jack — Founder of BuildStack

The Company: BuildStack is a project management platform for construction subcontractors — a sector Jack believes is massively underserved by tools like Procore and monday.com.

The Idea: Strong. The market: real. Jack himself spent four years working for a mid-size electrical contractor, so he knows the pain intimately. On paper, he’s a compelling founder.

At the Conference: Not so much.

Jack arrives with energy and enthusiasm. He works the room well socially. But when a partner from a well-regarded construction-tech fund pulls him aside for a conversation, things unravel fast.

Investor: “So what’s your revenue right now?”

Jack: “We’re still pretty early, so we haven’t fully focused on revenue yet — we’re more in the product-building phase. But we have some pilots going.”

What went wrong: Saying “we haven’t focused on revenue” at a seed-stage company raises immediate flags. Even if revenue is zero, Jack should own it confidently: “We’re pre-revenue. We have four paid pilots at $500/month each that convert to full contracts in Q2.” That’s a story. “We haven’t focused on it” is not.

Investor: “How many customers do you have?”

Jack: “We have about 15 companies that are using the product in some form.”

What went wrong: “In some form” is a killer phrase. It tells the investor that Jack doesn’t distinguish between paying customers, free users, and tire-kickers. The answer should be: “We have 4 paying customers, 8 in active pilots, and 3 who’ve signed LOIs.”

Investor: “Walk me through your unit economics.”

Jack: “Yeah, totally — so we’re working on getting that data together. It’s still early, so the numbers aren’t fully baked yet. But we think LTV is going to be really strong because construction contracts are multi-year.”

What went wrong: Completely. Even with limited data, Jack should have a model. “Our current CAC is approximately $1,200 based on our last three closed deals. At $500/month and an expected 24-month contract length, we’re looking at an LTV of $12,000 — a 10x ratio. We expect CAC to drop as we build outbound, but we’re being conservative.” That’s a founder who knows his business.

Investor: “What probabilities do you put on building a top global company in this space?”

Jack: “I mean — I think we can definitely get there. The market is huge and nobody’s really nailed it for subcontractors specifically. I’m very confident.”

What went wrong: Confidence without structure reads as naivety. Investors don’t want cheerleading. They want calibrated thinking.

Jack leaves the conversation with a “send me your deck.” The investor is polite but moves on within minutes.

Jill — Founder of ClearClose

The Company: ClearClose is a B2B SaaS platform that automates compliance documentation for independent mortgage brokers — a segment Jill identified while working as a compliance officer at a regional bank for six years.

The Idea: Niche. Precise. Exactly what early-stage investors tend to love: a founder with deep domain expertise, attacking a specific, painful problem in a large market.

At the Conference: Jill has prepared for this like she’s running a marathon. She knows her numbers, her narrative, and her answers — but she delivers them like a human, not a robot reading from a spreadsheet.

Investor: “What’s your revenue?”

Jill: “We’re at $28K MRR, growing about 18% month-over-month for the last four months. All from inbound — we haven’t touched paid acquisition yet.”

Why it works: Precise, contextual, and ends with a hook. The investor immediately wants to ask a follow-up.

Investor: “How many customers do you have?”

Jill: “32 paying customers. Average contract is $875/month. Our largest is a broker network with 14 offices — they came in at $3,200/month. We’ve had one churn — a one-person shop who closed down their business.”

Why it works: She distinguishes volume from value, gives a flagship customer example, and proactively addresses churn before she’s asked. That last part builds enormous trust.

Investor: “Walk me through your unit economics.”

Jill: “CAC right now is around $900, almost entirely organic — referrals and content. LTV at current churn of 2.5% monthly is around $35,000, which gives us a roughly 38:1 LTV:CAC ratio. We know that’s unusually strong for this stage, and we think it’s partly because we’re solving a compliance problem — customers don’t leave compliance tools lightly. Our payback period is under two months.”

Why it works: She knows the numbers cold, contextualizes them honestly (“unusually strong”), and explains the structural reason — which also doubles as a competitive moat narrative.

Investor: “Walk me through your economic scenarios. What probabilities do you put on each?”

Jill: “Sure. In our base case — which I’d put at around 55% probability — we close this $1.8M seed round, hire two engineers and one sales rep, and exit next year at $500K ARR heading into a Series A. In our high case — maybe 25% — the broker network deal becomes a full channel partnership, which accelerates us to $1.2M ARR in the same timeframe. In the low case — I’d say 20% — sales cycles stretch and we hit $280K ARR. In that scenario, we extend the runway by staying lean and push the Series A 12 months. We don’t see a scenario where the core problem goes away — compliance burden on independent brokers is only increasing.”

Why it works: Specific numbers. Real probabilities that add up to 100%. An honest low case. And the framing of the low case as a delay, not a death — which is almost always true in strong businesses.

Investor: “What’s the probability you build a globally leading company in this space?”

Jill: “Honestly? I think there’s a 30 to 35% chance we become the dominant compliance platform for independent mortgage brokers in the US — and I think that alone is a very valuable business. The international angle is real but it’s a 5-year story, not a 2-year story, and I don’t want to oversell it. What I can tell you is that in my base case, we build something worth building and worth backing regardless of whether we go global. The optionality is real. The dependency on it is not. You can also see our outcome analysis in our Investor Presentation and our Memo if you want all the details.”

Why it works: She doesn’t inflate the probability to seem visionary, and she doesn’t deflate it to seem humble. She reframes the question around the base case value — and shows the investor that she’s protecting their money, not just pitching her dream. Big bonus, she’s pointing to the materials, without bringing a full data room into the conversation.

Jill ends the conversation with three business cards, two follow-up meetings booked for the following week, and one investor who pulls his partner over mid-conversation to introduce them.

The Takeaway

Jack and Jill didn’t have dramatically different companies. In some ways, Jack’s market is larger. But Jill walked in having done the work — not to perform preparedness, but because she genuinely knew her business inside and out.

That’s what investors are actually testing. Not whether you can recite your LTV:CAC ratio. Whether you’ve thought hard enough about your company that the numbers are just something you know — the way you know your phone number.

The questions above are predictable. The preparation is entirely in your hands.

Walk in like Jill.

Good luck.

(Want to dig deeper? Check out Pawel’s list of 300 questions investors will want to ask).

This article is the second in a three piece series to help founders prepare for key conferences. Part I: The Founder’s Web Summit Checklist: 10 Things You Need to Prepare. Read it here. Part III: Going to Web Summit? Here Are the 15 Questions You Need to Prepare For the Investors You Meet. Read it here.

March 27, 2026/0 Comments/by Christian Rangen

Insights, Startups, Tools

Going to Web Summit? Here Are the 15 Questions You Need to Prepare For the Investors You Meet.

Did you know, pitching might not be your secret weapon after all. Instead, pitch less , and ask your investors better questions.

This article is part two in our three part-series helping startup founders prepare for major startup- and investor conferences. Read also part II and part III.

You’re heading to Web Summit — or any major investor conference. You’ve got your deck polished, your financials modeled, your slides tight. That’s what most founders spend their prep time on. We call that the internal lens.

Smart founders do something different. They prepare for the investors they’re going to meet.

Here’s how. If you know which investors will be at the event — and for most major conferences, you can find out in advance — feed their names into your AI tool of choice (Claude works great for this) and ask it to write a one-page profile on each investor. Then, based on each profile, generate five key questions you should ask them specifically. Highly targeted. Highly effective. This will show you’ve done your prep work.

But what if you don’t know who you’re meeting? Cold contacts. New faces. You have no idea who’s going to walk up and hand you a card.

That’s what these 15 questions are for. Use them as written. Use them as inspiration. Flex and experiment. But go in prepared.

Part 1: The Easy Questions

These are your openers. Softball, yes — but notice they’re all open-ended. Every single one invites a conversation, not a yes or a no.

1. What are you typically looking for? Simple. Broad. Let them talk. You’ll learn more from this one question than from ten minutes of pitching.

2. What are the metrics you want to see before you invest? Get specific early. Every investor has a mental model. This question surfaces it.

3. What stages do you typically invest at? Don’t waste their time or yours. Know where you fit before you go deeper.

4. What investment instruments do you commonly use? SAFEs, convertible notes, priced rounds — know what they’re comfortable with.

5. What does your investment process look like? Set your expectations. Understand the journey before you start it.

Part 2: The Intermediate Questions

You’ve broken the ice. Now you go deeper. These questions are designed to reveal how they actually operate — not just what they say they do.

6. Can you walk me through your investment process from first contact to close? First meeting, term sheet, due diligence, round structure, closing. What does that typically look like, and what timeline do you prefer to work within?

7. Talk me through your due diligence process. What are you looking for? What makes a company easy to diligence? How can we best prepare so you get exactly what you need?

8. Walk me through some of your most recent investments. What did you like about them? Why did you pull the trigger? What are the key insights from your most recent deal? This is where you learn what actually excites them — not what’s in their deck.

9. Once you’ve invested, how do you typically work with your portfolio companies? Board seats, advisory support, introductions, hands-on or hands-off — what’s your typical engagement model?

10. Who are the co-investors you most like to work with? Any strong preferences on who else is at the table? Any names we should know?

I wanna be your best deal ever! How can I return your fund in just five years? – OK, now you would have any VC’s attention.

Part 3: The Advanced Questions

These aren’t openers. Don’t lead with these. These are for the second conversation — over a beer, over dinner, when you’ve earned a real seat at the table. This is where relationships are actually built.

11. Walk me through your most successful investments ever. From the very first touchpoint, through the scaling journey, through the exit. How did you work together? What did the outcome look like — including the financial outcome? What made those relationships work? What was your MOIC?

12. We know the next two rounds will be critical. How would you typically work with us to get there? We’re not just raising this round. We’re thinking about the full journey. What does that partnership look like?

13. Let’s talk fund math. What’s your fund size, and what does the math look like for us to deliver a fund returner for you? We want to make sure that if you come onto our cap table, we have complete alignment on what success looks like — for you and for us. What numbers do we need to hit together to make you look great, and make your next fund a guaranteed raise?

14. Let’s talk exits. Given the current market, how are you thinking about liquidity? What’s your preferred timeline, and what mechanisms do you like to see? How do you structure your liquidity strategy?

15. If we were your single most successful investment ever — what would that look like? What would we need to deliver? What would we need to build together to make it, without any question, the best deal you’ve ever done across any of your funds? That’s the conversation we want to have. And we hope you want to have it too.

The Bottom Line

Fifteen questions. Entry level, intermediate, advanced.

Use them as examples. Use them as a starting point. But when you walk into Web Summit, remember this: you’re not there to pitch. You’re there to engage. You’re building a relationship with a long-term business partner — someone who might be in your corner for the next decade.

The founders who close the best rounds aren’t the ones with the slickest decks. They’re the ones who ask the best questions.

Go prepared.

This article is the second in a three piece series to help founders prepare for key conferences. Part I: The Founder’s Web Summit Checklist: 10 Things You Need to Prepare. Read it here. Part II: Meeting the Investors? Here’s what they’ll ask. Read it here.

March 27, 2026/0 Comments/by Christian Rangen

Consulting, Insights, Tools

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)

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.

March 2, 2026/0 Comments/by Christian Rangen

Accelerator, Insights, Strategy, Tools

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.

February 3, 2026/0 Comments/by Christian Rangen

Insights, News, Strategy, Tools

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:

Building Block

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.

_______________

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.

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.

February 3, 2026/0 Comments/by Christian Rangen

Insights, News, Strategy, Tools

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:

A B2B procurement platform in UAE ($100K)
An Egyptian fintech startup ($75K)
A Saudi logistics SaaS company ($120K)
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:

First hire (~$10M AUM): A principal/associate who can source deals, conduct diligence, and support portfolio companies—compensation $100K–$150K plus carry participation
Second hire (~$25M AUM): Either a portfolio operations person (platform team) or another investing partner, depending on firm strategy
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.

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

February 3, 2026/0 Comments/by Christian Rangen

Before we start… What’s your level of Scale Up! expertise?

The eleven Ways to Bring Scale Up! to market

1. Existing clients

2. Existing relationships

3. Domain expert

4. The first one is free (or, a lot of free pilots)

5. Engaging the ecosystem

6. The targeted approach

7. The mapping approach

8. Find the problem-owner approach

9. The hard work approach

10. Scale Up! GTM Workflow

11. Being active, waiting for random luck

Time to get started

How to read the EFRL

Summary

Scale Up Masterclasses Case Studies

Scaling to exit with Dubai Future District Fund

From Advisors to Growth Partners: How Norway’s Largest Bank DNB Elevates Startup Advisory with the Scale Up! Masterclass

Scaling up in the rising Egyptian ecosystem

The 15 Questions Every Founder Must Know Cold

The Two Founders: Jack vs. Jill

Part 1: The Easy Questions

Part 2: The Intermediate Questions

Part 3: The Advanced Questions

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

Let’s look at the four cases.

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

The Pattern: What Actually Passes Institutional Scrutiny

Building Your Data Room: A Practical Approach

The Real Benchmark

Accelerating entreprenurship with Scale Up!

Before we start

1. “Bits and pieces”

2. Discovery

3. Pilot

4. Workshop

5. Masterclass

6. Program

7. Education

8. Multi-year programs

9. Train-the-trainers

The best way? Just get started

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

The GP Exit Canvas: A Framework for Strategic Exit Planning

The VC Debate: Should Term Sheets Include Exit Provisions?

The Case Against

The Case For

The Verdict: Yes, With Nuance

Three Liquidity Mechanisms: Sample Term Sheet Language

1. Strategic Acquisition Facilitation Clause

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

3. Redemption and Put Option Mechanism

Implementing Exit Thinking: Practical Steps for GPs

Conclusion

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

A Dubai Story: The Nexus VC Journey

The Capital Structure Evolution

Stage One: Proof of Concept ($500K–$5M)

Nexus’s Genesis (2016-2017)

Nexus Fund I – The Capital Stack:

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

Nexus’s Growing Pains (2018-2021)

The Infrastructure Build-Out:

The First Hire Decision:

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

The Institutional Mindset Shift

Conclusion: Building for Permanence

Nexus’s Future (2026 Outlook)

ENGAGE//INNOVATE

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