On August 19, 2026, Mike Suprovici, co-founder and head of acceleration at Decile Group, spent an hour on the question VC Lab gets more than any other: where do I find my LPs? Kelly Schricker hosted. Mike has worked with most of the 1,003 firms VC Lab has helped launch, and his answer was that you're probably already looking at them.
Watch the full session here: You Already Know Your First LPs
This is a recap of what he covered, with links to the frameworks we've written up separately.
The short version
- Most public advice about LPs comes from a part of the industry that will never fund you, and applying it will waste your time.
- Large institutional LPs are prevented by charter from backing emerging managers. That's a structural fact, not a judgment on you.
- Nobody raising a fund one has a track record in the sense professional LPs mean. Angel investing and syndicates don't count.
- Your first checks come from people who've seen you work. Their networks produce the next ones.
- Your fund size is whatever you can actually raise. Coming in undersubscribed causes damage that follows you into fund two.
Venture has split in two, and most advice is from the wrong half
Mike opened by naming something that explains a lot of bad advice.
There's an established part of venture, roughly 4,000 funds, where capital recycles among people who've been inside it for decades. If you didn't break in by spending years at a firm, you aren't getting in that way. The dynamics that govern those funds are different from the ones governing a founder starting a firm from scratch.
The people who give the most confident public advice about LPs mostly come from that half. Mike named the pattern directly. The well-followed institutional LP accounts on X are describing a world that has essentially been the same for thirty years, and none of it applies to a new manager raising a first fund.
His point wasn't that those people are wrong. It's that they're answering a different question.
Why institutional LPs can't back you yet
The reason is structural, and it's worth understanding so you stop taking it personally.
Most large endowments and institutional LPs are prevented by charter from investing in the funds that first-time managers raise. Beyond the charter, Mike's explanation is about incentives. The people making those decisions are employees, not founders. They won't see results from your fund for ten to fifteen years, and they aren't going to carry the risk of backing an unproven manager that long.
Decile works on this directly, running education for LPs and operating its own fund of funds focused on new managers. But Mike was clear about the arithmetic. There might be ten funds in the world that specialize in backing emerging managers, against roughly ten thousand people a year attempting to start one. Don't build your strategy around that door.
Meanwhile new managers keep raising successfully, which is what 1,003 launched firms across more than 90 countries actually represents. The capital exists. It just doesn't look the way the textbook says.
Everything runs on trust
Strip it back far enough and fundraising is one thing. If someone trusts you, they'll back you. If they don't, they won't.
That's harsher in funds than in startups. A founder has a product and traction for an investor to assess. A first-time fund manager has none of that, so the LP is underwriting a person to manage their money for fifteen to twenty years. Mike's aside: it's also why you shouldn't partner with someone you don't know well.
So the first money comes from people who've already seen you perform. An old colleague. A mentor from an accelerator. An angel from your first startup. A friend from university. Mike was careful here, because this gets misheard as "ask your family for money." He isn't saying that. He's saying find the people who've watched you do something well, whatever the relationship.
Once a few of those commit, the network effects start. He gave a worked example. A manager had done a first close with trusted people. The largest check that followed, $250,000, came from a university friend they hadn't spoken to in twenty-five years, introduced by an existing LP who vouched for them. The existing LP spent their own trust capital to open the door, the thesis did the rest.
The mechanism runs trusted network, then their networks, then networks of networks, and it's how nearly every self-made VC has started. Which of those people to approach first, and how the conversation should change for each, is the subject of our recap of the LP Archetypes session.
Nobody has a track record
A question came in about building trust without a track record. Mike's answer was blunt. Nobody raising a fund one has one.
From a professional LP's perspective, a track record means two or three funds with realized DPI. Angel investing doesn't count. Leading syndicates doesn't count. Even a spin-out struggles here, because the performance belongs to the firm rather than the individual, and they often can't get access to the numbers.
He didn't defend this as fair. He described it as the conditions on the field, and the reason is the same as before. An LP is hiring a human being to manage money blindly for a decade, which is a different proposition from someone who picked well a few times.
The practical conclusion is to stop waiting. There's no qualifying step, no sequence of credentials you have to collect first. A Start Fund has a minimum close of $100,000, which puts a real first close within reach of most people's networks. Go talk to the people who trust you.
More on this in venture track record and first-time fund manager.
Fund size is an output, not a target
This was the part Mike asked everyone to pay attention to, and it's the most expensive mistake he sees.
Your fund size is determined by what you can actually raise, not by an aspirational number. Test demand with your confidants first. After five or ten meetings you'll know what's real, and you can put a multiple on it to get a target.
Oversubscribing is fine. Undersubscribing is not. Raise $2 million against a $5 million target and the model breaks, because these models scale up but don't scale down. If the plan was 25 investments and you can now make ten, the strategy you sold doesn't exist any more. Your LPs are unhappy, and every professional LP looking at your fund two sees fundraising risk.
As Mike put it, fundraising is a core competency for a fund manager in exactly the way it is for the founders you back. Promise $2 million and close $5 million and you look like someone who can raise.
We've written this up in how to determine your venture capital fund size, fund size pitfalls in emerging VC and how to oversubscribe your fund.
Fund two is underwritten on how you ran fund one
Someone asked how to position a fund two with no performance data yet, given the J curve. Mike said that's every fund two that has ever existed.
What LPs underwrite instead is how you handled fund one. Did you treat your LPs well? Is the back office genuinely professional, or held together with improvised tooling? You'll need at least half your fund one LPs to come into fund two, and a semi-professional LP will take both on-list and off-list references to find out.
He was emphatic about one failure mode. If your "fund one" was actually a multi-asset SPV or an improvised LLC, don't call it a fund. It surfaces in diligence on fund two, and by then the damage is the misrepresentation rather than the structure. Kelly added that every institutional LP mentor in the last Emerging Institute cohort independently raised intellectual honesty as what they're looking for.
Related: decoding first closes in emerging VC, and our explainer on the J curve in venture capital, which is why there's no performance to show at that stage.
Can you do this part-time?
Yes at the start, especially with a Start Fund, and that's how most people begin. But raising a fund means pitching somewhere between three and five hundred LPs over about eighteen months, and doing that alongside running a startup is hard to pull off. Most managers go full time during the fund one raise, and nearly all have by fund two.
Watch the full session
You Already Know Your First LPs, recorded August 19, 2026 with Mike Suprovici and Kelly Schricker. More sessions on the VC Lab YouTube channel.
For how the work gets sequenced once you're inside the program, see How to Make the Most of VC Lab.
Launch your own fund with VC Lab
The old route into venture was to apprentice inside a firm for a decade and hope for a seat. Decile Group was built to replace that, on the conviction that venture capital done right is a force for good and that the people best placed to back the next generation of founders are mostly nowhere near Sand Hill Road. VC Lab is a free 14-week accelerator, no fees and no equity, and it has helped launch 1,003 venture firms across more than 90 countries.
Apply to VC Lab at govclab.com. Managers raising funds two through four should look at the Emerging Institute. If you want to learn how venture works before raising anything, start with Venture Institute.