{{first_name}},

I can usually tell inside one conversation whether a sponsor is actually going to raise the money.

It's not the deck.

It's not the returns.

It's seven signals, and most of them have nothing to do with the deal itself.

Here they are, in the order I weigh them.

Every raise that closes has an anchor investor. Someone who moves first, moves big, or does both.

When I ask a sponsor who writes the first checks, I want names. Check sizes. The date of the last real conversation.

What I usually get instead is...

..."my network."

That's a hope, not an anchor. One is 200 pounds of galvanized steel buried in the seabed. The other is a cinder block on a jump rope.

An anchor investor does two jobs at once. They fill the first portion of your raise, and they make the next investor's decision easier, because nobody wants to be first and almost everybody is comfortable being second.

If you can't name yours, you're not raising yet. You're prospecting.

What percentage of the last raise came from people who were already in a prior deal?

If deal three is 50-60% funded by investors from deals one and two, that sponsor can raise.

If every raise is a fresh hunt, they have a marketing habit paired with an investor relations void, not an investor base.

Repeat LPs are just anchor investors you already earned. They cost you nothing to convince and they're the reason the next raise takes six weeks instead of nine months.

If this is your first raise, or your second, or your fourth, you're not seasoned yet. The market knows it even if you don't.

The fastest fix isn't a better deck.

It's an anchor operator.

An anchor operator is someone investors already trust to carry an investment from start to finish. A real track record in a specific niche or vertical, and a reputation that walks into the room before they do.

When you partner with one, investors aren't underwriting you. They're underwriting the pairing. That's a much easier yes.

Over time you become your own anchor operator. There's no magic number of successful deals and exits that qualifies you...

...investors decide that, not you.

You'll know it happened because behavior changes. Checks come earlier. Diligence gets shorter. Competitors start describing you as a serious player instead of a new one.

I've got a client in Dallas who's in the middle of that transition right now. He's built his name in medical office, and the biggest heavy hitter in his market treats him as a peer instead of a newcomer. That recognition is the signal. Not the deal count behind it.

Every other signal on this list assumes the deal is good.

A bad deal doesn't raise capital. And when it does raise capital, it raises what I call dumb money.

Dumb money isn't an insult to the investor. Some of the best people I know have written dumb checks. They wrote them because they liked the sponsor, they trusted the story, and they didn't know enough to ask the one question that would have stopped them.

That's the part people miss.

Dumb money is easiest to raise from people who already like you...

...which is exactly why it costs the most when the deal fails.

You don't lose an investor. You lose a relationship, a referral chain, and the credibility you needed for the next five deals.

A sponsor who walks away from a deal they could have forced is showing you the hardest thing to fake. They'd rather have no raise than a bad one.

A capital call. A missed distribution. A deal that came back flat.

Anyone can raise in a good vintage.

The operator who told investors the truth, took the hard call, and still filled the next raise has proven the relationship is real.

That's not a track record of returns. It's a track record of behavior, and allocators pay much closer attention to the second one.

Not just the number. Where it came from.

Personal liquidity is a completely different signal than reallocated fees or a friend quietly backstopping the GP piece.

It tells you how aligned they actually are, and how much runway they have to be patient when the business plan slips two quarters.

Ask the follow-up question. Most people don't.

Calls to soft circles. Soft circles to funded. Average check size. Days from first meeting to wire.

If a sponsor can't give me those numbers roughly, they have no IR process. Their last raise was luck plus effort.

That doesn't scale, and it doesn't survive a slow market.

One last thing, and it overrides all seven.

If a sponsor only raises when they have a deal under contract, none of the rest matters.

Capital formation is a continuous function. It runs whether or not there's a closing date on the calendar.

Treat it as an event and you will eventually miss one...

...and one blown close costs you more credibility than three quiet quarters ever will.

Grateful you let me into your inbox today.

Have a great Thursday,

Andrew LeBaron

Target returns are projections only and not a guarantee of future results. Actual results may differ materially. This is not an offer to sell securities. For accredited investors only.