It varies.
Generally:
- The most senior partners can get any deal done they want. Period. They make seek consensus, and may defer when they don’t get it. But in the end, they can do what they want.
- And the more junior ones need more buy-in from the rest. The more junior the partner, or investing professional, the more she/he needs others to buy-in. You’ll often be called back to multiple meetings at the office with different partners before you present to the main partnership in this case.
- Bigger funds often require a co-sponsoring partner for a deal. Another partner to agree to do it, as a process control.
- Smaller investments (measured as a % of fund size) often don’t require as much buy-in. An investment < 0.5% of a fund’s size often has fewer gates for partner approval. Many $500m-$1b+ funds, for example, don’t require full partner approval for deals < say $2m. They only require a subset of partners to approve the deal.
- Established partners with a rough/bad track record need much, much more support from other partners. Often, a lot more support. The other partners stop wanting the weak partners to bring down their results. In effect, bottom tier partners often may be “general partners” on a website but struggle to even get 1 deal done a year.
Most funds believe the best companies were less obvious investments. So true consensus generally isn’t necessary. But whoever has “the juice” at at the fund has to convince the fewest folks.
It’s not that hard to figure out if a partner, or even a non-partner, has “juice” at a fund:
- See what deals she’s done. Did she lead them? Or just “support them” on her bio. Are any of her investments “hot deals” yet?
- Just ask her what it takes to get a deal done at the fund.
- And don’t worry too much if you are talking to more junior partners. They still know how to get a deal done. In fact, they are often much more motivated to get one done. They have more to prove. And that may be the better choice for you.
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