Happy Thursday and welcome to another edition of Beyond TVPI.

Every Wednesday I write this newsletter, send it on Thursday and start thinking about the next one. But some of the most useful parts arrive afterwards, in the replies.

Readers bring examples I missed and ask questions that support or bring perspective to the original article. Three replies stood out when I looked back through the inbox, so this week I am handing most of the newsletter to them.

Enjoy the read,

Steffen

I wrote about why my view of placement agents changed over ten years as an LP.

One of my criticisms was familiar to most LPs. You tell a placement agent that a fund is outside your mandate, then receive another fund with the same profile a few weeks later.

A reader with many years of fundraising experience added a useful distinction:

That is the distinction I missed. Checking whether an LP's mandate has changed can be useful. Sending another clearly out-of-mandate deck is not.

She sees this happening in asset-backed credit today. A placement agent can learn what an LP wants while helping the LP understand a strategy it does not yet know well.

She put the difficulty plainly:

Her reply is a good example of listening.

As LPs, we often feel that we are part of a "see how many people we contacted" exercise. Some placement agents would send us a credit fund deck even though we have said several times that we do not invest in credit.

My only logical conclusion is the incentive was to show their client, how many LPs they had sent it to.

Asking "Is credit still outside your mandate?" and "Do you expect that to change?" is very different. It respects the answer and recognises that mandates can move.

And LPs should be valuing that distinction as well - even if some placement agent ask the question more than we’d like.

Last week, I argued that the third underwriting of a manager should be the deepest.

Prior knowledge should let an LP spend less time on the standard presentation and more time testing whether the strategy, team and process have stayed on track.

Another reader replied after going through the same problem:

I can make an argument that a re-up should pass a higher bar, not the same bar as a new commitment. From a diversification perspective, you are taking on more risks (but that’s a topic for another day).

For now, it suffices to say that if getting to know a manager better does not give you more confidence, that is at least a yellow flag.

In May, I shared the four or five pages I would use to present an LP to a GP.

A third reader told me that GPs changed their pitch once they understood what the LP team had already built. The team had never put that information into an LP presentation. #3a: How much of the funnel should an LP show?

At my old form, we shared percentages rather than absolute numbers. We calculated each percentage against the previous stage, not the original pool.

If 100 funds entered initial screening and 30 progressed, the first conversion rate was 30%. If 20 of those 30 reached the next stage, that rate was 67%.

That showed the GP how selective we were at each stage. The absolute numbers stayed internal.

I ranked process clarity first. A good reference list came second. The atmosphere in the room came third.

In my experience, clarity matters far more than speed. Placement agents see many LP processes and often act as gatekeepers for oversubscribed funds. They remember which LPs explain their process and then follow it. A clear process is usually a fast one anyway.

It becomes particularly important when a fundraise accelerates. During Alpine's 2021 raise, the timetable moved from a March-to-December process to a final close in July. LPs with a clear internal process could adjust. Others effectively sorted themselves out.

When a GP sees respected managers already in the portfolio, it knows the LP has earned those relationships. It may want to be on that list too.

The meeting atmosphere matters too. Ask the hard questions, but do not turn the room into an interrogation. It never hurts to be someone a GP would like to work with for ten years.

There are almost 1,200 readers of this newsletter, and I can only write from my own experience. Other LPs, GPs and placement agents will have seen things I have not.

These replies made the original articles better - and hopefully offers perspective to all others reading along.

Please keep them coming.

I recently shared an article on the Airtable acquisition, and it seemed to resonate, so I thought I’d make recommendations from my own media diet a recurring part of Founder’s Corner.

This week’s pick is Axios Pro Rata.

I’ve been reading it since before the pandemic. Every Monday through Friday, it gives me a quick rundown of the most important deals in private markets, followed by a broader list of venture and private equity transactions.

It takes about five minutes to get through and is one of the easiest ways I’ve found to stay on top of what is happening across the market without adding another research task to the day.

You can check it out here: https://www.axios.com/signup/pro-rata

This newsletter is written by Steffen Risager, the founder of FundFrame, a platform for LPs to manage their private markets investments.

Before that, Steffen was CIO at Advantage Investment Partners, a Danish Fund-of-Funds.

Steffen has a decade of experience as an LP, and has made commitments totalling approx. $6bn across fund- and co-investments.