Why is raising a VC fund harder than a startup round?

welcome to episode 44 of fundraising demystified today we talk about raising money as a fund manager with winter me founder and managing partner at coolwater Capital a unique fund of funds that provides an accelerator platform for emerging fund managers it's like white combinator but for funds if you ever wanted to start a fund this episode is for you winter comes from an Institutional limited partner background investing in the top fund managers in alternative Investments specifically Venture Capital he took his experience and authored the book how to start a venture fund winter and I talk at length about what it takes to find Alpha inventure Capital how he met over a thousand fund managers last year and his lessons learned from that experience and how difficult it is to raise fund as an emerging fund manager in this market as a reminder be sure to get our notifications every week of when these podcasts go live by going to join. thunder. VC again that is join. thunder. BC now on to the show welcome back everyone welcome to fundraising demystify today we have winter me with us founder and CEO of cool water Capital welcome to the show winter Jason thank you for having me on board and hopefully this is a show where lightning strikes twice ah I love the sound of that well you have an interesting background this is a little bit of a deviation from the typical guest we have on the show show you're supporting emerging fund managers in building and raising funds for venture capital and I would love for you to tell the audience a little bit about your background and what you're doing at coolwater yeah thanks Jason uh the background pretty simple um spent 12 years in the Bay Area worked at a couple of startups um but most of my career has been spent as an LP a limited partner in investing into managers fund managers and mainly emerging managers emerging Venture Capital funds so that's kind of the perspective I'm going to share uh on the podcast today I worked at a firm in San Francisco called Hall Capital Partners founded by ktie Hall who was very involved with the princ endowment so it's a very traditional approach to learning how to be an LP um what LPS would call the endowment model style of investing so investing mainly into Alternatives but through managers uh and so I felt like I took the training wheels off there um and built a lot of perspective not only on venture capital and private Equity but across asset classes like what are the return drivers what actually creates value depending on what you're investing into right real assets public equity private equities you know within private equities buyou versus Venture like what actually drives value so I thought it was a good foundational experience I moved over to sap I helped them build a large fund of funds practice so again as an LP but the the Nuance there was it was part of a larger direct investment Venture Capital firm team so I felt like I got both the lp perspective as well as like the VC like the year one VC investment perspective um and the other perspective I got there was actually as like an entrepreneur like an operator within a larger Corporation building an investment fund and I think that's largely what contributed to creating cool water and you know looking to give back into the ecosystem and support emergy managers because even with a large budget as part of a large corporation you know building uh a very large fund um inside of a organization with tons of resources and perspective and expertise it was hard right and it took years it took four and a half years right to really feel like it was starting to get dialed in um and so the empathy that that created was immense right and so I shifted in 2018 to really dedicate my life to supporting The Innovation ecosystem and the strategy is largely through supporting emerging managers so excited excited today to talk about emerging managers and and and why I'm spending time in this space so you had the fortunate ability to kind of tap into kind of all the different roles in the ecosystem and of itself from LP operator to you know GP uh so I think that's a pretty unique perspective that you bring to the table and you know let you to write a book on how to raise a venture fund and you know get you know access to you know emerging fund managers but to kind of dive in a little bit more on kind of the lp front you're talking about where you create you know where's value actually generated uh you I imagine you got exposure to all asset classes what made you lean in harder on Venture Venture felt like net new value creation right so I'm all for financial engineering because it's interesting it's intellectually stimulating but you know I was sitting on the private Equity team as my first investor role and investing across again like I mentioned buyout growth distressed Venture established Venture emerging Venture and it did feel like Venture Capital was intriguing because you were business building right like you were creating the value and you almost had like Venture if you think about it right like there's this dichotomy of business building and creating value out of nothing and then there's like the capital markets right like you're building into the capital markets from Venture but that was kind of what was intriguing to me and I think the like my bias is more entrepreneurial so for me like I was kind of drawn to that where I was like hey yeah you can do Financial engineering but what's actually contributing to Solutions in the world right like and aligning with those people that like everyone's kind of playing in you know the economy um but like who are the people that were again like net new generating impactful companies right again that would grow up into the capital markets and they would be valued at some point and the financial engineering would happen at some point but in the beginning it was like raw business building and like engaging with those people like if you're living and talking and thriving alongside of those people that's what got me excited I was like how do I hang out with these people more right how do I support them I think that explains why there's such a boom and interest in Venture Capital as a whole when it comes to people that would have gone to investment Banks and or leaving investment Banks where the money's at typically then you know Finding their way into Venture um but when we look at Venture as the asset class in it of itself you know in comparison to you know private equity and all the different uh options there are out there how do you kind of find performance and Alpha you know as an LP in the Venture Capital game yeah great question I think there's a way that cool water does it right so I mean I think you have to identify what Alpha is and how it's generated from my point of view it's generated from really strong networks and decision-making processes uh and so how do you identify people that have great networks great discipline great decision-making processes right I I think that's what cool water is effectively right like an um little anecdote right like I feel like I'm always trying to to break things and so I feel like my process for being an LP broke in 2016 where I couldn't meet with every single manager that I wanted to meet with because I was I was seeing public announcements of funds and I pride myself on meeting with everyone like I met with a th0 managers last year like I want to see every single opportunity in the world right like so then you can make really good investment decisions if you do that but in 2016 I was I started to see right and the market was growing it was growing very quickly again barriers to entry were coming down like the ability to start a fund was cheaper it was easier to do that like you said maybe there was this kind of cultural shift that was going on but you know that was kind of a a trigger in my mind where I was like the lp model is effectively broken or my model as an LP is broken like I need to see more people so how do I to your point like how do I identify these Alpha generators right shout out to Heather hartnet over at human how do I identify identify these like Alpha generators in the in the ecosystem and so I felt like there needed to be a new way like I'd almost identify cool water as a systems change operator where like we've kind of recreated the system of being an LP in a different way and that's through the accelerator right like who sees the most startups in the world the best brands or YC right so that you needed a change in the system of how to actually engage with managers to be able to identify them so okay fine let's like rewind the clock so I'm back in 2015 let's say I meet now with a, managers I'm I'm doing the old LP style of identifying Alpha okay try to find Alpha for me okay I need to look through your data room I need to read your ddq I need to read your PPM right I need to go through your pitch deck I need to engage with you I need to run a process fast forward a year you've met with how many funds 25 50 so you're missing like 975 managers that you are in your funnel but you actually have you don't have an opinion on them so like how does that make you a better decision maker how do you actually optimize your investment decisions if you haven't changed the system and so I think that was kind of the maybe epiphanic moment right where I was just like it feels like I'm in the lp world but it feels a little broken to me is there a way to change it right I'm not saying I need it to be fixed I'm just saying like is there another way to kind of identify Alpha in the market and I think that's what I've tried to create over last many years like developing this accelerator for funds how do you meet with a thousand people a year you take 20 to 40 calls a day for a few months out of the year and then you also have a very tight filter on folks that you know just aren't relevant for what you're offering value to at the moment so these like 15 minute just like quick call to kind of identify you know personality trade or just something about them or like one of the meta concepts of venture is like alignment right so what do we do at Cool Water we offer value added programs for emerging managers right um and so and we just keep on iterating on those programs to try to add more and more value try to make them more and more valuable right like we're in cohort 9 right now much tighter much more focused than even cohort 7 right because like we're just never ever satisfied with the level of value that we're adding and just keep on kind of like Recycling and reiterating into that um but yeah I think uh creating the process right I think we got definitely some good feedback in the beginning um of right like you know from people that had invested into similar models right just like how do you create the top of funnel and the filter and the ability to know what you want right like again it goes back to you decision-making processes if you have a good process you can run it very quickly right because it's tight it's focused um you know what you like you know what you don't like or even if you like it right like you know what's out of scope for the moment and so you know what do we do we run effectively two core programs we run a program for emerging managers are you an awesome investor and want to launch faster right and you are institutionally biased meaning like you want to create a great firm over time uh cool water is a great place for you um and we run a core program that is and that's that program is largely focused on launching and fundraising and understanding the institutional LP perspective right like in line with my first book how to raise a venture capital fund and then there's a core program around like building your back office right all this stuff you know I you know had the lucky experience of helping set up the operational due diligence processes and running those and really trying to understand like what does it mean to make that jump from emerging manager to established it's such a murky gray area that's so like it's debated on all the panels like Define emerging manager what's an emerging manager well when do you become emerged right it's like the never- ending debate so the second program like tries to like that's not an obvious answer but it tries to support that jump right like what is the operational due diligence process what do you need to set up to kind of be buttoned up and check the boxes so that you can get the institutional check and again that's an iterative process right it's a process it doesn't just like you don't snap your fingers and it happens you have to have the knowledge you have to have the implementation you have to build the organization around it right like you have to manage that process over time like there's these pieces there it's like okay that's the second program of like hey you want to do this you're institutionally biased right like how can cool water package it in a way that's digestible where it makes sense where it doesn't take you five or 10 years to learn right so your go to market is that much faster right I think this this process has already played out you know in the VC space right Fred Wilson blogging Brad Feld writing books people blogging for years you know you selling your company writing online you doing podcasts like there's this massive amount of knowledge that's like how do you build a startup company but there isn't like a massive amount of knowledge of like how do you build an investment firm right and that's what cool water kind of stands for like if you want to build a great investment firm right like what is the Corpus of knowledge you need and what is the Corpus of implementation skills you need to actually do that and management skills you need to actually do that and that's what cool water offers through Focus programming and an oversimplified way to kind of help correlate for our audience it's essentially like why combinator but for emerging fund managers in Venture specifically in terms of giving them the resource the access the network and support for fundraising and the structure uh and The credibility that you know comes with it's not you're not accepting everyone you know just like YC you know tons of applications and the more applications I guess that's part of your process get as many applicants as possible so you can see and be with as many people as possible um is that a safe assumption yeah yeah that's totally fair and again kind of like a a cultural inity as well right like you have to want to build a great firm and that's who we're looking for those people to join cool water watch it and for the sake of like education you know for maybe it's an exited founder who wants to you know start a fund I see that happen all the time it's a conversation I see it pop up all the time um you know or the the founder that is chasing venture capital to raise and doesn't understand kind of what it's like in the you know the VC shoes when it comes to actually raising capital on their side like what's the difference when it comes to you know say running a company and raising capital for your company as like a direct investment opportunity versus being a fund manager and raising capital for your fund another opportunity to create empathy between Founders and VCS um yeah I think the process for raising for a company it's it's still a process it still requires an immense amount of time and effort and coordination and organization and discipline right to to be successful um but I I think it's and this is going to at the risk of getting in trouble here I think it's easier to raise for a company than it is to raise for a VC fund uh and again like if you think about you're raising let let's just like play it out like you're raising for a company right you're selling the hope and the dream right people like you you're talented right they give you some money to build kind of what you're going to build fast forward 6 12 18 months like is it built or not right is it working or not like has the market validated it or not right and a fund doesn't really have the luxury of that right it's like have you built the fund or not yeah I swear like I went through cool water I I built the the business processes like I swear I have the fund product right the lp is going to be like well what's performance uh we wrote some checks into 10 companies and what are those 10 companies doing um well they're building so what's the performance it's like uh well we lost some of your money because we took fees on the fund right it's like okay um are you going to write more right like if you startup and you're like hey I lost some of your money and um I you I'm no like no further along in terms of performance and it's not clear if like my product has been validated and I haven't really built like the product isn't really any further along because I'm just I've just been fundraising this whole time like instead of Building Product and I'm a year and a half later like is a seed investor going to come in they're gonna be like what did you do with your friends and Family's money right and you can play that out like versus like saying like hey hit these core kpis right these core metrics like look at my progress right I grew 500% whatever the number is you can kind of like there's a narrative there with the startup that I think is like you can buy something that's more tangible and so I think it's easier to raise for a startup than if you were to do the same exercise with the fund right and so again I think a lot of it comes down to intention indications right Behavior you're kind of putting these pieces in place right like you're almost building where you know in the startup example you'd be like hey you know I know I don't have anything to show you I can't show you that I grew 500% but you know I actually have set up all the systems so I'm already a pre-ipo company right right it's kind of like that is the hey I'm a fund manager I know it's early in terms of performance and it's really hard to bet on me on something that's more tangible like in terms of like making money or whatever the metric is as an LP you want to kind of assess but look at everything I've kind of built the processes my intention of building the organization the policies and procedures I put into place the infrastructure I've set up all of that like look at my reporting like you can you make it tangible by like what you're building as a business you know before you actually have the performance and then your go to market is like much stronger you still need to be like excellent at sales between the two right but it's probably more difficult and then the other thing is like I think you know sometimes in the Venture world like it's okay to blow up the system and be like hey I never did Insurance before I actually come from this other other industry but look at how awesome I am technically I'm going to blow up insurance right and people are like wow that's okay wow that's a totally different take you're definitely the person to do it you've got the skill sets right and I like that you're kind of an outsider coming in it's harder to do that as a fund manager and be like I'm going to raise an insurance fund I've never done Insurance before I don't have any connections in the insurance industry I I don't even know like Financial Services generally you know I you know majored in XYZ that's totally unrelated to financial services Insurance like but trust me like give me like $20 million and I'm gonna like triple it or quintuple it in the next 10 years right is anyone G to give you that money no right and so again like I think there's the fund like raising Journey for a fund manager is different than like the fundraising Journey for a startup and I think you have to understand those nuances right even when you're saying cool water is the why combinator for funds like yes maybe as a heuristic but there are nuances of like being a fund manager that you have to understand and internalize in order to be successful I'm I'm glad you kind of chose the kind of controversial opinion that fundraising for a startup is easier than a fine because I personally agree I know a lot of Founders are probably like oh it's got to be so easy in their Ivory Tower like it's hard work did know that most Founders waste days of their lives chasing the wrong investors well as a Founder you know your time is your most valuable resource don't waste it on the investors that aren't going to write you a check here at Thunder we built a free tool that identifies exactly which VCS are worth your time to pursue we score your company against 3500 VCS and family offices that have been vetted and are actively writing checks into companies like yours get your AI recommended list of investors that will look like this absolutely 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VC now let's get back to the show um so when it comes to you know emerging managers and like that example you gave the insurance you know person no experience trying to raise money like what are you seeing in the market today that is actually getting funded from a from a fund perspective so emerging fund manager going out you know what are you seeing actually get funded and you know allowing them to kind of close on their you know fund one or fund two yeah uh it's a great question um I think I'll I think I'll break it into maybe three buckets so the first is just like the let's call it the authenticity story right like a narrative that sells well right like I was the insurance executive um that left I you know started to startups in the financial services space or Insurance space sold them coming to Market with an insurance fund like everything kind of lines up there's like a narrative right that kind of like a good like you thread the needle like very well across that I think that's still being funded like it's and that that hasn't changed like that's not a net new thing like LPS have always looked for that story right uh the fundraising Market is definitely more challenged in 2024 than it was in 2021 but again like there's that right like that really hasn't changed whether you're in yeah i' say 2005 2010 2015 2020 2020 24 like that that's probably like a tried and true archetype um that's still getting funded I'd say you have the um the folks that are just like persistent and incredible at fundraising that are still getting funds off the ground and this could be like your Capital network is an advantage your sales skill Marketing sales skills are like advantages um so those people are like still getting and again like that's more generalist but I throw a bunch of people into that bucket where it's like do you know again like how to raise for a startup do you know how to raise for a fund again like that's probably consistent as well um but in this market it's especially true because you need to be more disciplined and better at fundraising because it's harder right like you're gonna work three times as hard and you're going to raise half as much and so I think there's that element of like sales skills that's important and then the last bucket I'd probably say like themes that are the Zeitgeist and the ones there are as you would imagine right like Nvidia disruption AI right like the world is movie like AI is the new internet um climate right like everyone's kind of experiencing the volatility of like weather and you know that's becoming like almost like an international top down right like okay everything's getting pushed down it's like wow these huge gaps in the market are being created to address sustainability and climate so like the themes there like funds that are kind of aligning with these bigger macro shifts in like the world economy are being funded right rightfully or wrongfully so like some some people might be like in the climate space maybe they're not the authentic team but because they're kind of capturing the zeist they're being funded ideally you have in each of those three bucks like people line up in all three like you got the authentic story that they're incredible at sales and they're doing a theme that's like you know World positive right but I'm I'm saying like what's getting funded right now i' see another Trend that I've seen just through the last couple accelerators is the you know operator turn VC like there's much more of that behavior in this market than there was in 2021 when cost of capital was lower right there was more risks seeking behavior in terms of starting a new business starting a new Fund Raising a new fund when cost of capital was lower and more interest was in Venture Capital but you know cost Capital goes up uh interest in Venture Capital goes down uh you have a lot of like outflows of you know people that were dabbling in Venture because of the hot thing a couple years ago right that changes behavior from fund formation standpoint of who like which GPS are actually starting funds and so you have a lot more people that are probably just used to like if you started a company and like have had to persist with it for a while there's a certain Behavior right like you're just trudging through mud all day long every day uphill right and so I think like that mentality if you have it is not the mentality of like someone raising a fund in 2021 it's a different mentality and like not everyone has it and so I think the fund manager that I see in today's Market is much more aligned with like what it was 10 or 15 years ago when you're raising a fund right like a lot of people don't have that perspective like they have the up and to the right perspective of raising a fund they don't have like the coming out of the Great Recession perspective of what it was like 15 years ago right to raise a fund like they just didn't experience it so they feel like oh fundraising should be 2021 behavior when like actually Market is more today like this is how hard it is to raise a fund you're asking someone for all this money right and it's very hard to like just create value generally right and like what there's all these variables within Venture the access the network the portfolio construction the management all these things you have to do right all this trust you have to build with you know people that are going to give you that money I think that's like another thing that I've seen so the behavior like the person that's kind of starting it who's in Market who's actually getting funded there are these like more persistent mentality people like call it like founder mentality call it whatever you want but it does feel like people that have started a company in the past and been successful there and have they kept with it more of those people are starting funds in today's market than not than like traditional spin outs and do you think those kind of operator turn fund manager have a higher probability of success or have a higher probability of getting funded uh again like if it's an authentic story yes for funded for success I hope so um I mean I'd have to like if you gave me an example I could I could analyze it but I I think what you've seen as a bigger macro shift is what do founders want right like where how has the market shifted over the last 10 or 20 years I'd say the market has shifted to Greater transparency and more like more request for Value ad right so who can actually offer perspective on product perspective on strategy perspective on business building um you know who can help Founders right and if you're a former founder you kind of understand again what that means like you may have more empathy um to Founders like you may be better at helping Founders that may be strategic enough to actually like change the outcome right some of that's luck some of that skill um but uh it's hard to like say unless there's a specific example but I do think like generally the market has like wanted more authentic VCS meaning like VCS with more operating background that can help Founders and I'd say this is generally you'd have a better perspective on it than me probably but I'd say Founders want that as well where they're looking for functional expertise they're more Savvy about how they're building out their right they're looking for people that can be additive right where it's like hey how do I put this together and be strategic about it so like these F like these investors these emerging VCS that are coming in and they're filling out the round how do they actually like help me grow my business right and if you have like a really strong authentic background like where you can add value to the companies you're you know that are your targets that you're looking to put into your portfolio that probably resonates better in today's market than it would have you know 20 years ago maybe maybe not maybe it's the same no I would agree you know from a Founder perspective and just kind of seeing what I'm seeing in the market especially the more talented Founders that are either especially the second go around you know someone that's already had success uh they're choosing to kind of bring on because at some point Capital becomes a commodity there's a lot of capital you know out there it's who's going to kind of have the differentiator Beyond just capital or maybe specific turn sheets um and so someone that can add value might be able to come in earlier better terms and so on uh that can build and nurture a relationship with a Founder over an extended period of time as opposed to someone that maybe comes from a traditional Finance background who hasn't kind of been in their shoes albeit could be a great Finance year could have a great Network and have other value points um but hasn't necessarily been in that that founder shoes which you know For Better or For Worse you know there is definitely an appeal to a lot of Founders to to have access to those types of people at least one or two in you know their round especially in the early days to kind of add that additional guidance and perspective that uh you otherwise wouldn't you know they wouldn't have potentially and maybe definitionally this is why you see a lot of operators as emerging managers focused on early stage right and you see a lot of people with traditional more traditional kind of investment banking or financial backgrounds go to more growth stage firms because it's more of a financial exercise at that point to invest versus a you know harder there there may not be any right answer type exercise where it's like it is in that early stage days of building a company right it's like which path do we choose no idea right like there's no there is a right or wrong answer we'll find out about in like you know six months or six years but like y you kind of right like you're kind of have to have someone that has that perspective that can help guide you when like there aren't straightforward answers and everything you operate in is like a gray area yeah no I I would agree so going back to the supporting the ecosystem and supporting emerging fund managers um when you see these fund managers come to you and whether it's raising capital or just their overall structure what are some of the common mistakes that you're seeing these GPS make in their early days of you know setting up a fund yeah there's there's a few I'd say a big one is not being self-reflective enough in the beginning um and that can mean a few different things right when we talk about authenticity that could be you asking the question like okay I've never done Insurance before but I want to start an insurance fund like have you been have you like criticized yourself enough like how are other people going to think about that um I think that's that's kind of an important piece I think another one is like on the self-criticism like are you at the right stage right to manage other people's money and maybe the answer is like no right so maybe you go out too early for something where like you being an angel investor for another two or three years letting your angel portfolio mature a little bit longer right staying at that you know VC firm for a couple more years and letting your you know attribution grow a little bit more or yeah like trying one more you know swing as a Founder like and maybe you know you're even more successful this time and then you know you can have a larger GP commit your fundraising journey is faster um and Tighter like when you actually do your go to market for raising the fund like again that comes from like a certain self-awareness um and apprpriate exception of self that I think is uh is sometimes lost because you're so busy and like you know you're just running super hard and like that mentality of just got to get it done like it's all about effort um but I think a lot of a lot of like successful emerging managers have been pretty deliberate and intentional about like what the journey is and where am I in that part of the journey and just like looking at it from other people's perspectives including LP's perspectives which is like would I buy this asset right now would I buy this fun product right now like would I buy you as the team right now um so I think that might be be one mistake um I think another mistake that might be related but um just terms of like tactical advice like trial it right like you can sit in a vacuum sit in your sauna and like criticize yourself like all day long um but then you're like okay I've gotten to a point where maybe I should Circle this with a few people that I trust right kind of say like hey here's how I'm thinking about my narrative or my story or the fun Journey or the fun story fun narrative kind of figuring that out and like that iterative process is pretty important and having the right people to give you strong advice right like and maybe again this is maybe another debatable controversial point but like what makes a good board member right like what type of advice do they give you do they like give you like one super strong opinion there's no other opinions and way to navigate as a CEO it's like it's my way or the highway like is that a good board member like maybe maybe that's the type of advice you like to receive or is it more like have you thought about it this way and that way and here's three examples from my history of like where things have gone right or gone wrong right things to think about you're the decision maker it's going to be your fun product that you create finding maybe those people in the ladder camp that can help you think about the fun product You're Building from a few different perspectives right maybe find find some of those people I think that iterative process like if you're not doing it you kind of go out and it's like the person that starts the phone call talking for 20 minutes you're just like do you know like I I was here you know to I don't know like order dinner like I I didn't even realize this was going to be like a pitch meeting um like I dialed the wrong number so I think like if you just like figur it out in the beginning right like I think a lot of people are hard charging which is good like you want you kind of need that behavior right run through walls type of behavior but if you do it uh without thinking right and you know the walls too hard like then you you just end up falling backwards or falling flat on your face and that's like that's the iterative process that I think is outside of yourself it's with like a trusted group um I mean I could go on but yeah I think there's there's a number of like mistakes that GPS kind of make if they just maybe the big picture thing here is like if they slow down a little bit more and they really thought of like again if you're a former founder for example if you really thought of like what was the product that I created at my company now think about it as like what's the product I'm creating at my Venture firm and is this really strong both when you have nothing like and you're kind of like selling the dream and also like over time right how does that kind of narrative change and how does the fun product strengthen over time I think that's really important important and kind of sometimes people miss the force for the trees there so I think it's really interesting the point that you brought up about self-reflection and asking yourself you know are you ready to manage other people's money and personally I went through that process myself exiting my last company and kind of sitting on my hands like what do I do and I love the idea of running a fund but then that question came up and I was just like do I really know how to construct a portfolio do I really know how to you know deliver and returns and manage other people's money over an extended period of time and I thought the answer was no and I was like I think I need more reps I think I need more exposure I need to kind of get deeper into this industry beyond my limited perspective of just a founder and just an operator and you know see how the rest of the world works and kind of what the opportunity really is after I've kind of done this for an extended period of time because I'm you know still very young and have a long road ahead you know that was not the time for me and glad I did because then we went into 2022 so if I started a fund it was going to be an absolute nightmare um and so yeah I think that's really important advice and I hope everyone has you know someone in their corner to kind of ask you know that or have them ask that question and you know be able to reflect so I think that was a really really good point of advice that I don't think people hear often enough um you know you've kind of walked through a variety of different use cases and like situations for different GPS uh coming in and looking at this when it comes to to Cool Water you specifically kind of mention you have like a cohort model how does that cohort model work and what does that look like for maybe a potential fund manager who thinks they're they're ready to to apply yeah so as as mentioned we have programs that are different programs the way we've thought about building those programs or modules or are more focused on like what are the Core Concepts you need to understand as an emerging fund manager and what are the key problems you need to solve so it's grown right it's a very long list of like things that we think you need to understand or build or Implement um or manage right so that's kind of how we built it we have like these different programs if we're just talking about the core program for fund managers why have we decided on a cohort model for me the way I think about why is Venture successful right it's because of information sharing and strong networks um and like what's the speed of that information being shared what's the breadth of that information being shared and again like what nodes do you know to get things done quickly and as a venture capitalist that could be doing deals right that could be fundraising that could be answering questions that you could be pulling your hair out for 15 days or you know if you knew the right person you could ask you know very quickly and like answer it in like 15 seconds so again I think the the cohort model for me enables like these Network effects that are it's a very relevant Concept in inventure inventure capital in particular of just like how if even if we deliver a program right where we consult one-on-one right like how do we deliver more impact faster um and I think it's pretty obvious right but I think you I think there's like another concept that you have to like stack onto that it's like okay great that's obvious but the management of that like the management of network effects is probably the most important concept which is why the cohort works like if you just put people into a room right and you expected someone to throw the party right or someone to share their like deepest Insight right or someone to identify like their biggest problem would it happen probably not maybe it would organically with certain groups but I think the behavior would probably uh indicate that most likely it wouldn't happen right it just be discombobulated and like you wouldn't get to a good outcome but the coor model is like great what if we took a curated group of 20 of the most select Next Generation emerging manager next tier one firms like these people that are immensely ambitious and already like super successful right better than Stanford better than Harvard you know name your favorite whatever Vocational School um or you know transformational experience what if like you could put them and then you manage that group right and all of like the networks and all of the value ad and all the perspective right and then you layered on top of like a a program that just constantly iterates like we're just never satisfied with like how much value we're kind of like adding into that program so for me like that's the experience of coming into the accelerator where it's like you yes learn from cool water and there's like you know this body of knowledge I think all aspiring and you know existing fund managers should know but it's the ability to kind of like manage the network effects across the cohort that I think makes it super powerful it's that that kind of compounding effect of both of those things um and again like then you have cohort over cohort right so we've helped launch now over 200 funds right and that's over 350 GPS and so there's a lot of knowledge that comes from that right an immense amount of knowledge that comes from that right like this is I've written two books yeah I've you know written the outline for a third but like the knowledge that comes out of like all of these right like all all these smart people is like a Tome that captures just like what it means to like like build the best you know um most pure like institutional investment F like in the world right like who has that body of knowledge I'm sure there are other people that have it but that's it and then it's like you have to if you just delivered that right as a tone like it' be completely overwhelming right no one would digest it no one would read it maybe like two people in the world like you have to kind of process it as well so that's like the the you know the taking all the learnings and translating it is also an important piece which is why I think you need kind of like a centralizing factor like a cool water to kind of say like hey cohort model works great it actually compounds on itself and then like it just gets better every time right and like and it changes too like the fundraising Market changes every six months and like how do you pick up on those changes you don't pick up on it by talking to one person you get one perspective right but the cohort model delivered through a program where we have 50 plus teachers come in from all different LP archetypes share their perspective like that's very powerful in terms of like understanding the Zeitgeist of the lp market and then you have like all these different GPS from different geographies international national come in they're very smart they're super Savvy they're very plugged in they get it right they're sharing their insights like that kind of compounds on itself and you have a very good robust understanding of the environment in which you're selling the product right it's like you're a startup you know nothing about the client or the customer you go into the sales meeting blindfolded right sell your product like is that going to end well probably not go through the cool water experience as a cohort you have like very strong perspectives from the LP's perspective from the GP perspective across a bunch of different geographies right and now you go to sell your fund product into a very richly understood and richly informed environment right like you're very like prepared hopefully to increase your chances of success so overex explain that but that's kind of why the cohor model I think works but it doesn't it's not just putting people in a in a room together it's curating it it's managing it right and it's delivering programs on top of that so that there's this shared experience and like it's more robust knowledge uh kind of development and implementation that happens over the course of this program well it sounds like an incredible experience for anyone con considering launching a fund or in the midst of launching their fund you see typically only firsttime fund managers or do you see a lot of like people are on fund too or maybe they had a fund with someone else and they're starting a new you know new firm what do you what's the typical profile that you see coming in yeah so if you're not ready to be a fund manager we have a program that's just focused on doing deals and building track record like you need to be accredited but it's like how do you build a strong track record to actually have a go to market to actually have like an initial track record that turns into your fund product um but in terms of our core program it is we've had funds one through four I would say if you're fund three or four you're joining because you think this is a powerful community and you want access to it right um and I think if you're fun one or fun two you're interested in what do best practices look like and am I doing everything in my power to build the right product to start right and again that's a lot of fundraising is increasing your chances of success whether that's increasing the number of top of funnel or the number of qualified leads like or the like right like what are you trying to do to raise your fund successfully I think you should um just again like important important Concepts to Think Through yeah I think that those are all good points for for anyone looking at or considering the this is an opportunity for themselves and you know as we you know conclude here and kind of wrap up what what would be the best way for someone to learn more about cool water or learn more about you yeah uh I mean reach out on LinkedIn it's probably the easiest way so like hey heard you on the most amazing podcast with Jason um I'm a rock star and was hoping for an introduction to Jason but I'll be like and then you can be like and by the way like I thought K Water sounded interesting as well um any any more information you can ride on cool water so I'll make the intro introduction to Jason for you and then um if you're a fit for the podcast and then I will uh and then I'll send you some information on on cool water as well and kind of what what we offer as like value at to again you where you are in the journey are you an angel are you ready to launch your fund have you launched your fund Do you want to build your back office like what do you need in terms of support as an emerging manager I think um just give me a little bit of context there and I could probably share with you some more information and more details on on how to engage with cool water perfect well I'll be sure to leave the a link in the description as well as a link to your website and Linkedin as well uh winter it's been an absolute pleasure having you on the show and kind of getting a very different conversation that we usually have in terms of the other side uh of the coin in terms of raising Capital as a fund manager and as we kind of addressed earlier in the show like having empathy for both sides of the you know the the equation you know from Founders raising Capital versus uh funders you know raising Capital uh I think that was a unique conversation that you we're fortunate to have and and share with our audience so thank you for sharing that with us Jason thanks for having me on appreciate it this is fun thanks for listening to the show today we hope you learned something valuable and if you did be sure to let us know in the comments or by hitting that like button and if you're a Founder looking to raise Capital then join us at thunder. 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