Suzanne Heske and Emily Leder | SPMB Investment Practice
The best time to hire an investor relations leader is before you urgently need one. LP relationships take years to build, and waiting until a fundraise is underway leaves a new hire little time to develop the trust and institutional credibility that drive commitments. For many venture capital firms, the natural window to hire is between Fund III and Fund IV. In fact, 52% of our IR searches occur at precisely that stage.
The question is no longer whether to build an IR function, but how: when to hire, what level to target, and which LP networks the firm most needs to add. Here are the questions our venture capital clients ask most often, along with our candid answers.
When should we make our first IR hire?
Most firms we partner with make this hire before raising Fund IV.
By then, you likely have 1) a track record worth talking about, 2) institutional LPs to target, and 3) a GP stretched thin across firm and investment responsibilities. That’s the moment.
Among our venture capital firm clients, 85% expect to begin their next fundraise within approximately 18 months, including 64% within the next 12 months. Given the time required to recruit, onboard, and establish LP relationships, the hiring conversation should begin well ahead of the fundraise.
Do I pay for a senior leader or bet on an up-and-comer?
The question isn’t seniority. It’s “what does the person need to accomplish on Day 1?” We’ve seen Partners fail because the firm really needed a VP. We’ve also seen Associates struggle because the mandate required someone who could independently lead institutional LP relationships. Start with the work, then determine the level.
If you have no IR infrastructure and need someone who can build the function, manage LP relationships, and run a process without much supervision, go senior. A seasoned IR professional (typically a senior Vice President, Director, Managing Director, or Partner) brings credibility with LPs that a less tenured professional likely can’t, and they can advance the fundraising conversations through the funnel before handing it off to the GP. If the GP still needs to be in every meeting, the hire hasn’t created leverage.
If you’re a GP-led firm where you are the relationship and you need someone to free you up, an up-and comer may work well. They manage the CRM, LP communications, and reporting, and give you time for conversations that only you can have. This is usually the more cost-effective path for emerging managers.
The test: can this person carry the ball at least two-thirds of the way down the field before handing it to you for the close? If yes, you need a senior hire. If the ball never leaves your hands, you need a support hire.
If I do hire a senior IR leader, when do I add a support hire or #2?
The clearest signal: your senior IR person is spending most of their time on reporting and operations instead of developing LP relationships. That’s a resource problem, not a performance problem.
A support hire (usually an Associate, Senior Associate, or junior Vice President) creates the capacity for the Head of IR to focus on what you hired them to do.
Other triggers include a meaningful AUM increase, a new fund close, or expanding into new geographies or LP channels that require dedicated attention. The most efficient IR teams generally divide responsibilities cleanly: the #2 owns operational infrastructure and LP data management, the Head of IR owns relationships and high-level strategy. Avoid hiring a junior who covers the same ground as the senior; the goal is to expand the team’s capacity, not have two people doing one person’s job.
What should I prioritize if this is my first IR hire?
Two dimensions tend to generate the most debate: geography and LP channels.
On geography:
Start domestic. The North American institutional LP universe is vast enough to keep a first IR hire fully occupied, and those relationships are easier to cultivate without the complexity of international travel and time zones. Global coverage and sovereign wealth funds come later, once the domestic base is mature. The exception: if your fund thesis is explicitly international, geographic fluency is a must-have.
On LP channels:
Hire for your gaps, not your strengths.
Map your current LP base and identify where coverage is thin. If you already have strong endowment and foundation relationships, look for someone who brings pension, family office, or fund-of-funds networks you don’t have. Additive networks compound.
One of the most overlooked sources for that kind of additive hire is hedge fund IR. Their LP networks tend to look different from what most venture firms have built: more pensions, sovereign wealth funds, and multi-asset family offices. That means the relationships are likely net new to your cap table. Institutional maturity tends to follow too. Because hedge funds raise capital continuously rather than in discrete fund cycles, their IR professionals usually have track records that pre-date their venture counterparts.
The Bottom Line
The firms that generally get this right recruit ahead of the next fundraise, hire to solve for gaps in their LP coverage, and give their IR person autonomy to actually run the function. The ones that typically fall short wait too long to recruit, underhire for what the role requires, or stay too involved so that the hire never creates real leverage.
If you are building or expanding your firm’s Investor Relations or Capital Formation function, we’d love to talk.
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Suzanne Heske and Emily Leder co-lead SPMB’s Investment Practice, placing IR, finance, marketing, and operations leaders and investors at venture capital firms and other alternative asset managers.
To learn more about SPMB’s Investment Practice, visit spmb.com.
