Raising a first-time fund in 2025 requires a fundamentally different approach than it did in 2021. LP allocation to emerging managers has contracted by roughly 30%, and the LPs who are still writing checks have significantly higher bars for track record, differentiation, and operational maturity.
We interviewed 15 first-time GPs who successfully closed Fund I in 2025. Their collective advice paints a clear picture of what works in the current environment.
What Worked
- 1.A verifiable angel track record — every GP who closed had at least 15 personal angel investments with some measurable outcomes
- 2.A specific, defensible thesis — 'I invest in AI' doesn't cut it. 'I invest in vertical AI for regulated industries because I spent 10 years in healthcare compliance' does.
- 3.Anchor LP secured early — 12 of 15 GPs had a lead LP committed before their broader fundraise, which provided credibility and momentum
- 4.A realistic fund size — the median successful Fund I in our sample was $18M, not $50M. Right-size your fund to your track record and deal flow.
- 5.Personal capital commitment — every successful GP committed meaningful personal capital (typically 2–5% of fund size)
What Didn't Work
- ▸Pitching institutional LPs without a warm introduction (zero conversions reported)
- ▸Raising on projected returns without realized outcomes in the angel portfolio
- ▸Fund sizes above $30M without institutional LP backing
- ▸Competing on access to 'hot deals' — LPs hear this from every emerging manager
- ▸Using a deck-first approach instead of relationship-first with potential LPs
“My Fund I took 14 months to close. The first 8 months were mostly rejection. The last 6 were momentum. The turning point was when my second angel investment had a 12x markup at Series B. That one data point unlocked three LP commitments.”
— Inner Ping member, Fund I GP
Start angel investing now with your own money. Build a portfolio of 15–25 investments over 2–3 years. Document your thesis and decisions. This track record is the single most important asset you'll need to raise Fund I.
The LP Landscape: Who's Actually Writing Checks
Not all LP capital is created equal, and emerging managers waste enormous time pitching the wrong allocators. In 2025, the LP landscape for Fund I managers breaks down roughly as follows:
- ▸High-net-worth individuals and family offices: ~55% of Fund I capital. These are your most likely LPs. They move faster, require less institutional process, and often invest based on personal conviction in the GP.
- ▸Fund-of-funds focused on emerging managers: ~20% of Fund I capital. There are roughly 30 active FoFs in the US that target emerging managers. Getting into one is competitive but transformative — a single $2–5M commitment can anchor your fund.
- ▸Institutional allocators (endowments, pensions): ~10% of Fund I capital. Nearly impossible for true first-time managers unless you have a prior relationship. Don't spend time here unless you have a warm intro to the specific decision-maker.
- ▸GP-led commitments and friends/family: ~15%. The unglamorous but essential foundation. Your personal check plus capital from people who know and trust you directly.
The Fundraise Timeline Nobody Talks About
Among the 15 GPs we interviewed, the median Fund I fundraise took 11 months from first LP meeting to final close. But the distribution was bimodal: 5 closed in under 8 months (all had anchor LPs secured within the first 2 months), and 6 took 14–18 months (all were building LP relationships from scratch). The takeaway is stark: if you don't have an anchor LP within 90 days of starting your raise, recalibrate your approach or your fund size. The GPs who closed fastest had been building LP relationships for 12–18 months before they formally launched.
The 'Stealth Raise' Approach
Seven of our 15 GPs used what one called the 'stealth raise' — sharing deal flow and co-investing with potential LPs for 6–12 months before formally raising. This approach converts at roughly 3x the rate of cold fundraising because LPs have already seen your judgment in action. One GP shared 14 deals with prospective LPs over 10 months, co-invested alongside them in three, and when she formally launched Fund I, 60% of her target was soft-circled within six weeks.
- ▸Common Fund I pitch mistake: leading with your macro thesis instead of your specific, verifiable edge. LPs hear 50 macro theses a year — they remember zero of them.
- ▸Another mistake: asking for too much per LP. The median LP check in successful Fund I raises was $250K. Don't pitch $1M minimums unless you're targeting institutional allocators.
- ▸The fatal mistake: raising Fund I larger than your deal flow supports. If you can't point to 8–10 actionable deals in your pipeline, LPs will question whether you can deploy the capital productively.
The emerging manager path is harder than it's been in a decade. But the managers who come out of this environment will be battle-tested and disciplined. The best time to start building your track record was three years ago. The second best time is now.
Daniel Kwon
Daniel runs a $120M fund focused on secondary transactions in late-stage startups. Before starting Pacific Rim, he was an early employee at Uber and Coinbase.