1. Have Sufficient Resources for a Lengthy Fundraise.
Raising a fund takes lots of determination, time and money. Some people rush into raising a fund without considering whether they have the resources to successfully raise a fund. Raising a first-time fund can take a long time, in some cases 18 to 24 months (or more), and can cost over $1 million, which the partners of the emerging manager must pay out of their pockets until the fund has its initial closing, at which time fundraising expenses (excluding placement agent fees, see below) are reimbursed by the fund. The partners must have sufficient resources to finance the costs of fundraising as well as the costs of opening and maintaining an office (with staff). In addition, each partner of the emerging manager must have enough resources to finance that partner’s personal household expenses during the fundraising. Having the resources to fundraise for an extended period of time is critical to the success of raising a fund.