How to Raise a VC Fund in Australia - Part I (Getting Money through the Door)

Everything I wish I knew before raising $15m.
A 3-part instruction manual for first-time fund managers.

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👋 This is Part 1 of a 3-part series on raising and running a VC fund in Australia.

✅ Want the full checklist of every step across all three parts?
👉 GRAB IT ON NOTION HERE

This series is presented in partnership with Reuben AI, the data backbone for private capital. The platform emerging fund managers use to replace the spreadsheet stack and run institutional-grade operations from fund one.

Launching today. Use code BATKO for 15% off → goreuben.com

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Disclaimer: this is not financial or legal advice. I don’t hold an AFSL. Please consult a lawyer and accountant. Everything below is my experience and recollection, and I may have mis-remembered some finer points.

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$10 million in verbal commitments.

Gone. In a month.

The tech crash hit, stocks went down, and every LP who’d shaken hands over coffee suddenly couldn’t find their chequebook. We had to restart from scratch. Different investors. New conversations. Bringing the old ones back to the table slowly, painfully, one by one.

Had I known what I’m about to cover, it might have all been a bit faster. Maybe it wouldn’t have. But at least I would have gone into the process with a whole lot more confidence and awareness.

I spent 8 years in VC, raised over $50m across multiple funds, and learned most of these lessons the hard way. So I wrote them up.

If you’re a founder, this will give you empathy for the other side of the table. The complexity your VC dealt with to even get to the point of writing you a cheque.

If you’re considering raising a fund for the first time as a GP, this is your instruction manual.

Here’s Part 1: getting the money in the door. Parts 2 and 3 will cover due diligence, deal flow, and running the fund post-close.

💡 Your Story: The Only Thing That Matters First

To start: why should investors entrust you with their money?

Not just “deliver venture returns” (expectation: 3x cash-on-cash within 10 years), but outperform every other fund they could put that money into.

You have three levers to let your unique advantage shine through:

1. See it - get access to deal flow. Unique thesis, strong brand, overlooked geography, underrepresented founders.

2. Pick it - make great decisions. Domain expertise, differentiated thesis, pattern recognition.

3. Help it - be useful to the companies you back. Make the investment better, or build a reputation that feeds back into #1 and attracts the best founders.

You’ll have to touch on all three.

But the one that matters most is “See it” - access to deal flow.

In VC, 1 out of 100 companies will bring all the returns. That’s the Power Law. So your LPs need to believe you’ll see the deal before it happens and get space on the cap table.

The question every LP is really asking: “How will you get in front of founders and get access that nobody else has?”

The strongest access stories I’ve seen aren’t about competing with other VCs. They’re about building a whole new pipeline of founders. Unearthing the unpolished, the hungry over the proven. That’s where venture returns come from - where nobody else is looking.

If you’re a first-time fund manager, your access story is your #1 asset. Not your track record (you probably don’t have much of one). Not your thesis (everyone’s got a thesis). Your ability to see deals that others can’t.

Spend 80% of your pitch prep here.

“I spent over a decade in strategy roles at Xero, Barclays, and EY watching private capital firms drown in operational complexity.

The GPs who struggled to raise weren’t short on conviction. They were short on infrastructure. That’s why I built Reuben.”

— Kat, Founder, Reuben AI

See what Reuben AI does → goreuben.com (code BATKO for 15% off)

🤝 The Investors (LPs)

The world of fund investors - limited partners, or LPs - is unfortunately not a well-documented one. There are no reliable lists. A handful of events and conferences scratch the surface, but most of it is relationship-driven and opaque.

Let’s break it down, largest to smallest:

#1 Superfunds

The deepest pockets. Every fund manager wants them. But two problems first-time fund managers don’t appreciate:

Size mismatch. Superfunds are large. Very large. Hundreds of millions is a drop in the ocean of what they manage. Sounds great? Unfortunately, not. Their teams need to allocate time to opportunities that move the needle, so they often won’t look at commitments under $100m. And they don’t want to be a majority LP in your fund (too much single-LP risk). So to keep a $100m commitment under 50% of your fund, you need to be raising $200m+.

Regulatory burden. Even getting the sign-off to invest in your fund means a couple-hundred-page Due Diligence Questionnaire (DDQ). That’ll take a whole ops team a couple of weeks. Then layer on quarterly reporting requirements with tight turnaround times - like providing Net Asset Value (NAV) statements within a couple of business days.

You need a well-oiled operations team to service a superfund LP. And you need to account for that cost in your management fees.

Superfunds require DDQs, tight NAV turnarounds, and quarterly compliance reporting. That used to mean hiring a full ops team. Reuben AI gives emerging managers the same institutional-grade infrastructure from day one: DDQ management, NAV reporting, and audit trails built in. The governance layer that used to require a 10-person back office, now available from fund one.

Start for free → (code BATKO for 15% off)

#2 Family Offices

When you’re managing generational wealth of $50m+, it can make sense to employ a full-time team to manage your money. After superfunds, family offices are what most fund managers pin their hopes on.

The problem: they’re notoriously stretched. A tiny team spread across all asset classes, with VC often untapped and unexplored. More often than not, the investment thesis is about wealth preservation rather than growth. The VC narrative of 3x returns can fall on deaf ears.

Furthermore, there’s no single place for family offices to come together. They’re dispersed and hard to find - they often don’t even have public profiles or websites.

The common adage: ”If you’ve met one family office, you’ve met one family office.” Every single one is unique in its investment mandate.

I was fortunate to work with the family offices of some of Australia’s most iconic founders - the founders of Atlassian, Canva, Culture Amp, Up Bank, and AdoreBeauty. We also worked with Tattarang (the Forrest family office) and Wollemi Capital. Over time, we started bringing them together into a kind of family office hivemind - sharing best practices around investing in tech.

That took years to build. As a first-time GP, you’re unlikely to start there. But if you can land one or two family office LPs, they often connect you to others.

#3 Individual Investors

Individual investors will be the vast majority of your fund.

Fortunately, angel networks have sprouted over the last decade. You can start with your city’s network - Sydney Angels, Melbourne Angels, Perth Angels.

The newer, faster, and more active networks have grown out of programs bringing keen-to-learn investors into startups: programs like First Believers, AirTree’s Explorers, VC Catalyst, and UNSW Angels.

Bottom line for first-time GPs: your fund will almost certainly be 80%+ individual investors. Build your LP pipeline the same way you’d build a sales pipeline. Track every conversation, every commitment, every follow-up.

📐 Fund Size: Work Backwards, Not Forwards

“How big should my fund be?”

Wrong question. The right question: how much can you deploy well?

Model your deployment. What’s your target check size? How many companies per year? What follow-on reserves do you need? Work backwards from there.

In my case, we modelled the pro-rata rights of our best portfolio companies and landed on $12–15m to effectively build an index of the best companies that would raise over the next 4 years.

The Management Fee Reality Check

Every non-VC asset investor shakes their head at the “outrageous” 2% per year management fee. But when you do the numbers, it really isn’t enough until you get to a pretty sizeable fund.

You need to pay for (or rent) an AFSL, do all the reporting, cover legal, compliance, insurance - and then you also want to get paid.

Here’s the reality:

• $10m fund→ $200k/year. You’ll barely cover operational expenses. You’re working for free.

• $50m fund → $1m/year. You can hire a handful of people.

• $100m fund → $2m/year. Now you can build a team around you.

• $500m fund → $10m/year. This is where economies of scale kick in.

And the nuance most people miss: it’s not actually 2% every year for the full duration.

The usual structure is 2% of committed capital during the investment period (4–5 years), then 2% of working capital (committed minus written-off capital) after that. So the total management fees over the life of a fund roughly range from 14–17%.

I’ve seen fees vary from 1% in big follow-on funds to 3% in high-demand funds, plus staggered, upfront, or even waived fee structures.

On a $10m fund you have $200k/year to work with. Every dollar you spend on manual fund admin is a dollar not going toward salaries, deals, or LP relationships. Reuben AI’s tiered pricing (including a free tier) means your operational stack doesn’t eat your management fee. Start lean, scale when you’re ready.

See pricing → (code BATKO for 15% off)

🏛️ The Regulatory Scaffolding

This is where most first-time GPs’ eyes glaze over. But it’s also where the value of this post lives. So let’s go through it properly.

Managed Investment Trust (MIT)

You’ll most likely want to raise your fund as an Attribution Managed Investment Trust (AMIT). To qualify:

1. Widely held - you need at least 25 investors.

2. Not closely held - fewer than 10 investors can’t hold more than 75% of the fund, and a single foreign investor can’t hold more than 10%.

Now you start appreciating the complexity of getting cornerstone investors like superfunds on board. They write huge cheques, but you still need a lot more LPs to follow to meet the widely held requirement.

Foreign Investors

To qualify as an AMIT and not get in trouble with the Foreign Investment Review Board (FIRB), which is constantly updating its policies:

1. Any one foreign investor can’t be more than 10% of the total fund.

2. Total foreign investors can’t hold 40%+.

This means you need to be very deliberate about your LP composition from the start. Every new foreign investor requires you to look into their local tax laws. Trust me, not fun. Not cheap.

ESVCLP

Another consideration is favourable tax treatment for your LPs.

To qualify as an Early Stage Venture Capital Limited Partnership (ESVCLP), the fund needs a minimum of $10m committed capital within 2 years of its first close.

The tax benefits to LPs are exceptional - **capital gains tax is waived**. But the regulatory obligations on the fund manager are way more stringent.

Even if you don’t qualify for ESVCLP, the Early Stage Investment Company (ESIC) status of your portfolio companies can flow through to your LPs. ESIC gives investors a 20% tax offset on qualifying investments (capped at $200k). ESIC offset is upfront, whereas ESVCLP only gets the tax benefit when the fund has a gain (triggering CGT). But in the grand scheme of things, ESVCLP would likely be a better tax benefit if we’re talking dollar terms.

One important note: AMITs can’t have controlling rights in their portfolio companies. In effect, this means you can’t have veto rights or board seats. This catches a lot of first-time fund managers off guard.

AFSL (Australian Financial Services Licence)

Running a venture fund is a highly regulated endeavour. You’re offering a financial product, which means it needs to operate under an AFSL.

You can either get your own:

• Requires plenty of experience

• Training and at least one designated Responsible Manager

• Annual audit and financial statements

• Cash flow and NTA projections

• Risk management systems

• Takes 6–9 months

Or you can rent one - roughly $20k/year plus $15k/year compliance costs. But you’re at the whim of your AFSL holder. They’re ultimately responsible for your compliance and will require regular reporting.

AMIT thresholds, ESVCLP obligations, FIRB foreign investor caps, AFSL compliance. Each one is a spreadsheet waiting to break. Reuben AI is the single source of truth for your compliance and governance layer: LP composition tracking, FIRB cap alerts, audit trails, and decision provenance. Not a spreadsheet. Not a workaround.

See how it works → (code BATKO for 15% off)

⚡ Quick Reference: Part 1 Checklist

Before you move on, here’s your punch list:

✅ Thesis - Define your See it / Pick it / Help it narrative. Lead with access.

✅ LP Pipeline - Map your realistic LP targets across superfunds, family offices, and individuals.

✅ Fund Size - Model deployment backwards from check size and portfolio construction.

✅ Management Fee Model - Run the numbers. Can you live on what 2% generates?

✅ Structure Decision - MIT/AMIT vs ESVCLP. Understand the trade-offs.

✅ Foreign Investor Cap - Know your FIRB limits before you start taking meetings.

✅ AFSL Strategy - Own vs rent. Make this decision early; it shapes your timeline.

✅ Legal Counsel - Engage a fund establishment firm. Budget $80–120k.

✅ Want the full checklist of every step across all three parts?
👉 GRAB IT ON NOTION HERE

🔜 Coming Up

Part 2: Due Diligence & Deal Flow - how to find, evaluate, and win deals without a research team. From triaging 1,000 inbound pitches to running 360-degree founder diligence.

Part 3: Running the Fund Post-Close - the ops that quietly kill emerging managers. IC workflows, LP reporting, capital calls, compliance, and the reporting treadmill.

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This series is presented in partnership with Reuben AI, the data backbone for private capital. One connected platform covering deal sourcing, due diligence, portfolio monitoring, LP reporting, and compliance. Built for fund managers who can’t afford to throw people at operational problems.

Use code BATKO for 15% off → goreuben.com

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If any of this resonates or you’ve got questions, hit me up. Reply to this email or DM me on LinkedIn. I’ve been through this and I’m happy to share what I know.

And if you’re raising a fund right now - good luck.

You’re going to need it.

But you’re also going to love it.

🤙