The LP diligence conversation is changing

What changed

Five years ago, LP diligence for an emerging manager was mostly qualitative. Network quality, thesis clarity, personal background. The spreadsheet was an afterthought.

That's changed. Institutional LPs — family offices, endowments, funds of funds — have professionalized their emerging manager programs. They're running structured processes. They have frameworks. And they're asking different questions.

The shift isn't toward harder questions. It's toward more specific ones.

The questions LPs ask now

The diligence conversations that are happening now look different from the ones that happened in 2019.

On decision-making:

• Walk me through your last three passes. What made you pass, and have any of those companies proven that decision wrong?
• When your IC had a split view on a deal, how was that resolved?
• How has your initial thesis been updated based on what you've seen?

On consistency:

• Do all of your deals go through the same evaluation framework?
• If I picked two deals from your portfolio at random, would I see the same analytical structure applied to both?

On learning:

• What's the biggest mistake you've made in the portfolio and what did you change as a result?
• How do you track whether your thesis is performing?

These questions have a common thread: they're asking for evidence of a systematic process. Not the claim — the evidence.

What systematic managers can show

A manager running a systematic process can answer these questions directly.

Every deal has a thesis score — you can show the distribution. Every IC session has a transcript — you can walk through the reasoning. Every pass has a rationale — you can show it across 50 deals and demonstrate consistent criteria being applied.

This is a new kind of diligence artifact. Not a portfolio tracker. Not a pitch deck. A decision record.

The LPs who are building their emerging manager programs around this kind of evidence aren't there yet in large numbers. But the ones running the most sophisticated programs are starting to ask for it.

Getting ahead of it

The fund managers winning institutional capital right now are the ones who anticipated this shift before they were in the room.

They built the record before they needed it. They ran IC sessions before any LP asked what their IC process was. They configured their thesis criteria before they were asked to prove their thesis was consistent.

When you're in the room and an LP asks "can you show me how you evaluated your last deal?" — the answer is either a document you pull up in thirty seconds, or an uncomfortable pause.

Build the record now.