The counterintuitive discipline that turned an 18-month Fund I into a 30-day Fund II close.
The Desperate Phase
Raoul Felix Maier was raising Fund I with no institutional backing and no spinout pedigree. Every check mattered. Every dollar counted. This is the reality for nearly every emerging manager in the early stages of fundraising.
And he still turned people down.
“There’s a huge trap in fundraising to just take whatever check you can get. In Fund I, when we desperately needed every single cent, we turned down people. We did.”
How to Spot a Problem LP
The surprising thing about identifying difficult LPs is that it is easier than identifying difficult founders. Founders put on their best face. They want to sell you. LPs do not have the same incentive to hide.
“With founders, they put their best face on. They want to sell you. But with LPs, they’re actually buying from you. They have a totally different behavior and they’re more likely to show you who they really are.”
Red flags show up naturally in early LP conversations. You do not have to probe or test. Difficult people reveal themselves because they have no incentive to hide.
Dismissive behavior. How does a prospective LP treat you before they have committed capital? If they are dismissive during the courtship, it only gets worse after the check clears.
Reference check signals. Talk to other managers who have taken money from this LP. The venture capital community is smaller than it appears. Ask directly: “Is this someone you would work with again?”
Gut signals in the first meeting. If something feels off early in the process, pay attention. Raoul’s advice: “Trust your instincts. They’re pretty good. Do your reference checks.”
The Long Game
This discipline feels painful in Fund I. You need the capital. Saying no to a willing check feels like self-sabotage. But Raoul was building for the long term.
“The reason why we were lucky is because we are blessed by a great set of people. I think there’s another huge trap in fundraising to just take whatever check you can get.”
The word “lucky” undersells it. He curated his LP base deliberately, knowing that the people in Fund I would determine the experience of every future fund. The emerging manager who takes every available check in Fund I often discovers that those LPs become the loudest critics in Fund II.
The Payoff
Fund I took 18 months to close. Fund II took one month.
The re-up rate from existing LPs was near total. New LPs came from referrals—people that existing LPs personally recommended. A curated Fund I LP base created a Fund II that practically raised itself.
“That essentially allowed us to raise first closing within four weeks.”
How to Say No
Raoul does not recommend being confrontational. Simply do not move forward. Do not send documents. Do not push for a close.
“They’re just people who you can identify in a conversation. Actually, not that hard.”
Trust your instincts. Do your reference checks. When multiple signals point the same direction, walk away. The check you turn down in Fund I might be the best investment you ever make in Fund II.
Emerging Institute helps emerging managers build the LP curation strategies and institutional relationships needed to raise Fund II and Fund III. Applications for Cohort 4 are now open.