What are the real frustrations of Emerging Managers?
by Andreas Munk Holm, creator turned angel LP and the founder of EUVC.
by Andreas Munk Holm, creator turned angel LP and the founder of EUVC.
I sometimes get some interesting feedback from the venture community. This week, I got one from a frustrated emerging manager that I thought I wanted to share. A big point for bothĀ the LPs and the service providers out there ā hope it leads to some reflection. š
As promised, I wanted to share with you some of the āfrustrationsā we, as Emerging Managers, face. I hope this provides some food for thought for your podcasts, posts, and content in generalāI imagine many of your followers are in similar situations.
Iām not one to complain, but I believe if someone well-connected can highlight these challenges and potentially drive change in the industry, it's worth a try.
Problem 1: The Experience Mismatch
My background is in acceleration and venture capitalāIāve set up accelerators, run over 100 programs to help startups scale and raise capital, worked with more than 1,000 startups, and built a truly global network.
On the VC side, my experience is a bit atypical: Iāve helped to raise a fund and served on the board of directors, but our LP was the government, and we didnāt operate under a traditional GP/LP structure. Technically, Iāve never been a GP. I also co-launched another VC firm, joining on day zero, managing operations but, again, not as a GP. The structure was similar, but not quite the same.
What Iāve noticed is that LPs tend to think in black-and-white termsāif youāve never been a GP, the answer is "no." This creates a challenge for someone like me, who has the relevant experience but doesnāt fit neatly into that box. On top of that, thereās a preference for finance experience (often from banking) over field experience, which I believe is more important. Thereās a fundamental difference between running a small business and working with corporations, and many VCs (coming from the finance sector) seem to misunderstand this. If you look at the financial plans and decision-making processes used by some VCs, itās clear they donāt fully grasp the struggles of smaller businesses ā rather think in a corporate structure.
Problem 2: A Harsh Ecosystem
The GP/LP connection ecosystem is in a strange placeāeveryone seems eager to take advantage.
Thatās why I was pleased to see your reasonable approach to pricing; so far, youāre the only one.
Let me explain. When you start a startup, the ecosystem supports you with perks, discounts, mentoring, and events. But when you start raising a VC, the same ecosystem suddenly demands premium prices for every service. There are countless middlemen with big promises, platforms claiming to be the biggest, and back-office providers eager to charge HIGH fees. Nobody wants to help; everyone wants a piece. (In the meantime, many of these middlemen donāt even understand the basic legalities of their role.)
Iām not saying everyone should work for free, but itās surprising how little support exists for first-time managers. Everybody wants to change the industry, which will be probably done by the first time managers, but nobody wants to help ā odd.
Ā The market doesnāt seem to realize that first-time managers (and micro-fund managers) are on the edge, spending heavily on legal fees, events, and meetings, often with limited resources. Weāre just regular folks ā mostly.
Weāve even encountered shady practicesāsuch as a free program that turned out to be a sales funnel for back-office services or an āLPā running a web platform who tried to sell it to us with the promise of investing, but only if we paid a monthly fee for the platform. Itās a tough landscape.
A few ideas came to my mind:
We should have a LIST of service providers who actually care forĀ and support first-time managers.
We should have a mentor pool ā including experienced GPs, lawyers etc ā who would love to support first-time managers. And we should bring them together in the online space fromĀ time to time.
We should have more people like you who deliver news, trends and educational content on a truly affordable price. Maybe you should serve as a resource deposit with templates etc (see my next topic)
Problem 3: Lack of Understanding of Resources
There are very few programs tailored specifically for first-time managers, despite the abundance of crucial questions we need answers to. Here are a few examples:
Raising capital from the US, feeder funds, back-office support, SEC compliance
Licenses (EUVECA, RVECA, etc.)
General solicitation: what to say and what not to say
Legalities of brokerage services
GP/LP structures
Where to register your fund
Financial planning: capital call structures, key ratios, who pays the setup fees, LP economics etc.
Most of the educational resources focus on pitch decks and outreach, leaving these critical topics largely unexplored.
