Somerville: Senior VC spin-out funds raise under the radar and are highly competitive
Hunter Somerville · 20VC: The Framework LPs Use To Assess Emerging Managers, What Concerns and Excites LPs in Potential Opportunities & The Current State of Seed Today with Hunter Somerville, Partner @ Greenspring Associates · Jan 21, 2019 · at 11:17
Hunter Somerville, Partner at institutional LP Greenspring Associates, explains how LPs evaluate and compete for allocations in spin-out funds led by senior partners.
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“I think if you have someone that's been a partner or a senior member at an established brand who decides to leave and start something smaller, more focused on their own, those are generally highly competitive to get into. There's a big access premium. Most people don't know that they're even happening until after they've been announced, because what happens is the partner that's spinning out to do a dedicated operation goes to their closest LP relationships, Some of whom they've worked with for a while or that they know separately and get it done pretty efficiently. And being that the investors that have backed them in their prior firm are probably larger check writers and the fund that they're raising now is smaller. It's pretty competitive for allocation. And I would agree with Paul much easier to raise those and is done sort of under the radar.”
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