VC funds find LPs through: (1) existing relationships — most first-time fund managers start with people who know them (former colleagues, portfolio founders, angels); (2) placement agents — third-party fundraisers who have LP relationships and earn 1–2% of capital raised; (3) LP databases and directories (Preqin, PitchBook, TVCA); (4) conferences (SuperReturn, ILPA, Family Office conferences); (5) referrals from portfolio companies and co-investors. Warm introductions are 10x more effective than cold outreach.

LPs evaluate VC funds on: (1) track record — prior fund returns are the primary filter; (2) investment thesis — is it differentiated and does the GP have a structural edge?; (3) team — experience, stability, and alignment; (4) fund size — is it appropriate for the strategy?; (5) terms — management fee, carry, hurdle rate; (6) portfolio construction — ownership targets and follow-on strategy; (7) references from portfolio founders and co-investors. First-time funds need to compensate for lack of track record with deep differentiation and strong personal references.

A fund of funds (FoF) is an LP that invests in other VC funds rather than directly into companies. FoFs provide diversification across managers and vintages for their own LPs (often institutional investors or HNW individuals). Notable VC-focused funds of funds include Cendana Capital, Sapphire Partners, Industry Ventures, and Hamilton Lane. FoFs are particularly important for emerging managers — Cendana has backed dozens of first-time funds that went on to become top-quartile performers.