Minimum Viable Capital Call
A checklist before investing (or asking for) more money
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Minimum Viable Capital Call
Happy Thursday! 👋
I received a call a few days ago from an LP who wanted to hire me to advise him on a capital call decision.
Shortly thereafter, he mentioned that the GP has not provided any financials to date and he only has occupancy numbers.
I proceeded to tell him that I don't think I can help and it doesn't make sense to hire me either - it's impossible to evaluate a capital call without a basic foundation, and the GP not willing to provide basic information is likely in and of itself a directional answer.
It's impossible to evaluate a capital call without a basic foundation
But what is that foundation?
What I set out to do today is explain what the minimum components should be of such a capital call communication, without which it is somewhere between difficult to impossible to make a logical investment decision.
Reasons to read this:
GPs: to ensure that you're providing enough information to LPs to make a decision
LPs: this article will provide you with a checklist of necessary information in order to make a decision on a capital call