Is it too late in the season for Traditional?
May 27, 2024
by a searcher from Columbia University - Columbia Business School in New York, NY, USA
Trying to get an understanding of when peak season is and when investors are typically filled - is it too late in the year to start a traditional raise?
from Northwestern University in San Francisco, CA, USA
If you have some flexibility on timing, you could begin doing introductory calls with investors and building relationships while also interning with a current searcher who has a cap table of investors that you want in your fund. This will not only give you search experience and demonstrate your commitment, but also place you in a favorable light to some of those investors. Then you can officially start fundraising in ~October as part of the 2025 commitments, with a launch date in Q125. You could also take the self funded approach for the summer prior to a raise in the Fall/Spring, up to you. Both will give you the search experience and help you refine your pitch and show commitment.
My only caution against officially launching your fundraise now is that investors may like you but be full, and if you have been raising all summer and come back to them when they start making commitments again in the Fall, it might be a negative signal that you haven't closed. It's really up to you on the investors you want and your belief in your ability to raise. Good luck! DM if you want to chat / if I can be helpful.
from The University of Chicago in Chicago, IL, USA
This is not to say that they will not commit this year, but it is an uphill battle at this time.
From your profile, you are graduating your MBA now, which would be a better starting point than "non-traditional path-ers", especially if you have met some investors during your MBA tenure and/or have recently taken an ETA course.
What can be done, and I've seen people choosing this path is: Self-fund for this year, start relations with investors now, take your time to build and refine your PPM, develop a deal pipeline and overall operational strategy. As you execute these points, you can start gathering soft commitments for next year's early cycle (think Jan/Feb).
This way you will prove to investors you are highly committed to the ETA structure, you will be a experienced searcher by the time of fundraising, you will have personal relationship with investors and you may even find a self funded deal and avoid the search fund initial fundraising all together!
Best of luck!