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- Short Description: You can find startup company leads from your fund investors. LPs as Sourcing is more often part of a larger sourcing strategy rather than the primary sourcing strategy.
- Benefits:
- Alignment: Because you are investing their money, LPs are aligned with your interests. They are less likely to send you something they know is fraudulent or bad.
- Potential for Quality: If LPs understand your strategy and have good judgement about your stage, they can provide high quality referrals.
- Trade-offs:
- Enough Volume: Most funds do not have enough LPs that can generate enough dealflow to make this a significant source.
- Quality Can Vary: Depending on the type of LPs, they may not know how to judge an opportunity at your stage. Or they may not identify the stage or sector. There is a reason they hired you as GP!
- Practice Saying No: You will want to practice saying no to your LPs which may be uncomfortable at first.
- Examples:
