Eric Bahn has pitched his fund to prospective LPs thousands of times. And when he was raising Hustle Fund's 3rd fund, he was able to close about 15% of LPs from the first call alone. Clearly, the man is doing something right.

Today I wanna talk a little about Eric’s strategy for closing LPs.  

The Follow-Up Email

*sidenote: This is Eric’s actual pitch for Fund III. He told me though that this has changed quite a bit, so reach out to him if you want to hear his latest framing.

Once Eric is done pitching the LP, the LP will say something like “Ok, can you send me a little more information about the fund?”. Eric will say “sure thing!” and they’ll end the call. Within 1 minute – literally 60 seconds later – an email will appear in the LP’s inbox. The email has all the information the LP needs to dig deeper. Data room, info on the team, details on our portfolio support program, links to our blog and events, etc.

His goal here is to keep the momentum going.

The email ends with Eric's promise to follow up in one week after the LP has had a chance to process the information.Then, he actually follows up a week later. And again a week after that. And Eric will continue to follow up with this LP until the LP explicitly says s/he isn’t interested.This strategy has served Eric well. He once got a commit after following up with an investor 13 times.

The Regular Updates

Another thing Eric does as part of his closing strategy? He adds the LP to our LP newsletter.

Oh by the way, you should have an LP newsletter. We send ours monthly, but quarterly is perfectly fine. The goal here is to keep prospective LPs excited about what you’re building.

ou know how the best founders send regular updates to their investors? Well, VCs send newsletters to LPs. These newsletters include announcements about new investments, updates on existing portfolio companies, links to thought leadership pieces, profiles highlighting talented team members, reminders about upcoming capital calls, etc.

You should get permission before you add anyone to this newsletter. Once the LP agree to be on this distribution list, these regular updates will (hopefully) keep them looped in to all the awesome stuff you’re doing. And this will create fomo and (hopefully) lead to an investment.

A CRM Masterpiece

Eric talks about his CRM with as much pride as he talks about his kids. True story. I can’t blame him, though. His CRM is a thing of beauty. In addition to all the normal stuff you see on a CRM (name, company, contact info, type of fund, last contacted date), Eric populates the CRM with another crucial field: a due date for the next outreach.

So every day, Eric opens up the CRM and sees who he should follow up with. This leads to consistent outreach to prospective LPs. It also allows his teammates to keep up the momentum if Eric is out sick or traveling.

Doing lots of closes

As it turns out, fund managers can do multiple closes when raising a fund. So let’s say your target is $10m, but you’ve only raised $2m so far. You can do your first close, initiate a capital call, and start deploying that money – while you continue fundraising.

Yes, this is real.

The upside to this strategy seems obvious, but let’s break it down anyway. Doing multiple closes allows you to start bringing startups into your portfolio while you’re taking meetings with potential LPs. When you’re raising your first fund and don’t have much (any) traction to speak of (yet), it might be useful to point to your growing portfolio.

“Look, family office! Look at this great company I invested in! Don’t you want to get in on this deal? It’s not too late to join my fund and watch this startup grow.”

In fact, Eric recommends doing 3 or 4 or even 5 closes while fundraising. No shame.

Always be closing

Look, I get it. Asking LPs for money, banging on the front door of their inbox, sending them regular reminders... it might feel a little awkward. But staying quiet out of respect or embarrassment will likely lead to not raising a fund at all.

Be kind, be respectful, and be closing.