A Family Office's Honest Take on Fund I Investing

Most Fund I managers will never hear this directly. The LPs who take emerging managers seriously rarely talk publicly about how they do it, and the ones who don't take them seriously have nothing useful to say. So the actual framework — what a thoughtful family office looks at, where they get stuck, what tips them from discomfort to conviction — stays hidden behind closed doors.

Domile from Willgrow, a first-generation family office based in Lithuania, has spent years doing what most allocators avoid: systematically underwriting Fund I managers. We published this piece on our LP side and it resonated widely, precisely because it names the things most LPs think about but rarely say out loud. For GPs raising or preparing to raise a Fund I, this is an unusually direct look at how the other side of the table actually works.

Enjoy the read 📚 (5 min)

Most family offices stop reading a fund deck the moment they see it's a Fund I. Not because they've done the analysis and passed — because the discomfort of underwriting something with no institutional track record feels like a problem too hard to solve. So they don't solve it. We invest in venture funds for a family office, with a focus on emerging managers in the US and Europe. Fund Is are a part of what we do. Over time I've built a framework for getting comfortable with them — not by pretending the uncertainty doesn't exist, but by knowing exactly where to look to reduce it.

There's no shortage of content about emerging versus established managers. According to Commonplace's LP survey, the most common reason allocators choose emerging managers is potential for high returns; established managers win on consistency and risk profile alignment. Neither finding is controversial. What's underexplored is the more specific question: what about Fund Is? Because when most allocators say "emerging managers," they actually mean Fund IIs and IIIs — there's a track record, some portfolio history, something to underwrite. Fund I is a different exercise entirely. And that's precisely why it's interesting.

Lowercase Capital's $8.4 million Fund I — backed Twitter, Uber, and Instagram — is widely considered one of the best-performing venture funds ever raised, reportedly returning 250x. Initialized Capital's $7 million Fund I wrote early checks into Coinbase and Instacart, returning 55x DPI. The data backs this up at scale. StepStone's recent analysis — a very rigorous public study of emerging manager performance — found that Fund Is outperform the median roughly 60% of the time, compared to around 50% for mature funds, with performance declining progressively as fund sequence advances. More importantly for long-term LP strategy: among managers who deliver top-quartile Fund I returns, 43% maintain that ranking in Fund II and 66% deliver above-median performance.

The opportunity is real. Fund Is remain systematically underallocated not because the analysis doesn't work out — but because most LPs never attempt it. The reason is discomfort. And discomfort is something that can be worked on.

The emerging manager universe has never been larger or noisier. Carta's 2025 data shows 40% of new funds have under $10 million in commitments and 67% have under $25 million. New vehicles launch constantly, quality signal is weak, and most will never raise a Fund II. Simultaneously, the top 30 VC funds captured 75% of all fundraising capital in 2024 — meaning the very top is inaccessible and everything below is crowded.

Good Fund Is exist. Finding them and getting comfortable enough to write the check is the actual job.

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The goal isn't to eliminate uncertainty — that's impossible at Fund I. It's to reduce it systematically until there's enough conviction to act.

1. Who Else Is In It — And Why

Seeing a respected fund-of-funds, an endowment with a track record in emerging managers, or a credible family office in the cap table doesn't replace diligence. But it tells you something real: someone else did the work and landed in the same place. When my analysis points to yes and credible others have independently arrived at the same conclusion, that convergence is a signal worth weighing. This isn't following — it's triangulating. If I'm the only person who sees it, I ask myself why.

2. Track Record — It Exists. It's Just Messy.

"We can't invest in Fund I — there's no track record." I've heard this constantly. It's almost never true. What Fund I managers don't have is a clean track record. What they usually do have is a history of investing — as angels, scouts, or investors at previous firms — that tells you a great deal about how they think and whether they've been right before. My approach has three layers. First, build a shadow vintage: take every investment the manager has made, group by year, and ask how that cohort would have performed as a fund. Check sizes matter less than you think — a $25,000 angel check into a great company at the right moment tells you more than a larger late-stage follow-on. Second, look at co-investor quality over time. Consistent presence alongside top-tier investors at earliest stages is not an accident. Third — and most important — how early did they get in, and why did the founder accept their ticket? That question tells you whether someone is a real investor or a lucky one. One calibration note: a manager who has never run an institutional fund will not present institutional-quality data. The deck may be missing information, numbers may be inconsistent. This requires more effort.

3. Personality — Investing as a Lifestyle

Launching a Fund I makes no financial sense unless you're genuinely obsessed. Management fees barely cover operating costs. The only rational reason to do it is irrational conviction.

What I look for — and what is very hard to fake — is someone for whom investing is not a job but a way of being. They show up where nobody else bothered to because that's where the best founders were two years before anyone noticed. They find founders on weekends. They remember every company they looked at and have a view on why it worked or didn't. Their purpose — getting to the best founders before anyone else, by any means necessary — shows up in conversation. You can feel it. You can definitely tell when it's absent.

4. Team — Have They Been Tested Together?

The most important team question isn't headcount — it's whether they've been through something hard together. Have they co-invested? Do they have a shared history of disagreement and resolution? If the team formed specifically to raise this fund, I want to understand why these people, and why now. StepStone found no correlation between number of founders and performance — but from a risk perspective, key person concentration is real and worth understanding. What I care about is coherence, not headcount.

5. References — Ask the Question Nobody Asks

Most LPs call the provided reference list, ask broad questions, get broad answers. That's not diligence — that's a comfort exercise.

The question I care most about: why did this founder accept this investor's money in the first place? Especially when that investor was writing a small check into an oversubscribed round. What did they bring? How did they get there? The answer tells you whether you're looking at a real investor or a lucky one. Real investors have a repeatable way of getting to founders early. Lucky ones have one good story.

For spinouts from existing firms, this is especially critical: who actually sourced the deal, and who led it? Attribution in venture gets rewritten constantly. Getting to the truth means going off the provided list — founders from deals that didn't work, co-investors with no incentive to be kind, former colleagues who knew the person before they were raising.

6. Operations — The Unglamorous Differentiator

Operations separate a professional institutional fund from an expensive hobby.

I don't look for perfection — a Fund I shouldn't have the infrastructure of a $2 billion platform. I'm looking for intentionality. Have they chosen service providers deliberately? Is the fund administrator one that actually communicates? Is the legal structure set up properly from day one, or are they planning to fix it later? A fund running on goodwill and spreadsheets will create problems that compound.

This is also one of the few places where LPs can genuinely add value beyond capital. Family offices who invest across many funds know which platforms work and which are a persistent source of pain, which LP portals are actually usable. That operational knowledge is real value for a first-time manager making these decisions with limited time. The best Fund I LP relationships go both ways.

Investing in a Fund I is not just a single allocation decision. It's the opening move in what could be a decade-long relationship. LPs who get the first fund right aren't making one bet — they're buying access to Fund II at the right time, with the right terms, as a trusted partner rather than a new name trying to get into an oversubscribed vehicle.

The family offices building the best venture portfolios aren't the ones with the most sophisticated access to established managers. They're the ones who backed the right people at Fund I and have been compounding both returns and relationships ever since.

The managers who understand what this process actually looks like from the other side of the table — who build for it rather than around it — tend to be the ones who earn the first check. And then the second.

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