February 13, 2024

Raising an Alternative Capital Fund - A Preview

Happy Tuesday, friends! Today I want to set the stage for a series that I will share in the coming weeks that will distill my thoughts on raising an alternative capital fund or vehicle. I will focus on the nuances of raising capital for something different -- something most LPs aren't yet thinking about. This is different from a "here's how I raised my first fund" how-to because I'll share what I learned that I think is crucial going from an idea to a spreadsheet to now having raised almost $150M to fund alternative capital investments at Novel.

Here's what I'm going to share with you:

1. Lessons learned developing a thesis for alternative capital. What matters and what doesn't.

2. How LPs really think about investing in funds with nonstandard approach, how to align your strategy with theirs, and how to know when you're barking up the wrong tree.

3. The biggest unexpected hurdles and problems that I've seen impact emerging managers as they build their funds.

4. Thoughts on different approaches to portfolio construction.

I'll also be diving deeper into these topics with capital entrepreneurs in upcoming podcast episodes. For a sneak peek into some lessons learned, tune in to these 2023 episodes for some real talk about how it works on both sides of the table:

- Hear Ruben Alonso's take on raising capital for his CDFI, Altcap, to fund entrepreneurs with institutional capital here.

- Hear Tyler Tringas of Calm Fund share the difficulties he encountered and the lessons he learned as he pursued institutional investors for a new fund here.

- Hear Jacob Haar of CIM share how he thinks about upstart alternative lenders when making decisions about who to commit capital to here.

That's it for today, friends. Our Raising an Alternative Capital series starts two weeks from today. Now that I've said it out loud, I have to deliver!