How to write a venture capital fund Thesis?

A successful venture capital fund thesis follows a proven template used by over 60% of new VC firms:

"[Fund Name] is launching a [$x MM] [Stage] venture fund in [Country/City] to back [Geography] [Sector/Market Companies] [with Secret Sauce]"

Essential Components

Three key elements form the foundation of a strong fund thesis:

• Fund Identity: Name, size (ideally under $10MM for new managers), and investment stage
• Geographic & Market Focus: Clear definition of operational base and target market
• Secret Sauce: Unique value proposition backed by quantifiable metrics

The Secret Sauce Hierarchy

The most compelling metrics for demonstrating credibility, in order of importance:

1. Investment exits
2. Investment performance
3. Capital raised
4. Sales closed
5. Companies helped
6. Network size
7. Years of experience

Best Practices & Common Pitfalls

Successful Example:

"Terra Ventures is launching an $8MM seed fund in São Paulo to back Brazilian B2B SaaS companies, leveraging the GP's experience scaling 3 SaaS startups to $10MM+ ARR"

Key Pitfalls to Avoid:

• Being too broad in focus
• Making unquantifiable claims
• Mismatching fund size with strategy
• Lacking credible differentiation

The article emphasizes that while specificity is crucial, the thesis should serve as a strategic guide rather than a rigid constraint, allowing funds to maintain some flexibility while providing clear direction for investment decisions.

Read more here: https://govclab.com/2025/04/14/vc-fund-thesis/