Here's a story I hear too often from brilliant founders:

They got their early preclinical data through grants and a modest pre-seed and decided it was time to raise venture funding. So they did what felt logical - they built a spreadsheet of 50-70 funds, names they got from STAT headlines or a “Top-100 Investors in Biotech” list shared on LinkedIn, and started reaching out.

Cold emails, LinkedIn connection requests, and of course, trying to get warm introductions to anyone who might know someone.

And then they waited… months, sometimes years. Chasing the same mega-funds everyone else is chasing, sending follow-ups like dropping pennies into a well, watching their runway get shorter and shorter, feeling like they are being left with fewer and fewer options.

Meanwhile, they're missing a structural shift that's happening right beneath their feet.

Leslie Feinzaig and Peter Walker (Carta's head of insights) recently described venture as splitting into two planets. On one planet, you have mega-funds deploying billions into consensus bets - the deals where "legibility" matters more than contrarian insight, where everyone is chasing the same obvious opportunities and competing away their returns.

In biotech, you see this playing out in real time. The billion-dollar funds are piling into GLP-1s because Ozempic proved the market. They're backing the same well-validated oncology targets - even when the pipeline drugs might only add 2-3 months of progression-free survival. It's not that these are bad investments. It's that they're safe investments. They're what you do when you're managing assets, not taking venture-style risk.

This isn't what venture capital was supposed to be.

Venture was designed to make contrarian bets - to back things that look crazy until they work - and then look obvious in retrospect. But when you're deploying a $2 billion fund, you have to bet big - and you can't afford to bet big and bet wrong very often. So, you chase consensus. You index to the market. You become, as Feinzaig puts it, "an asset manager indexing private tech companies."

But there's another planet.

On this planet, emerging fund managers are still doing what venture was meant to do: backing founders with real conviction, taking early risk on science that isn't yet consensus, and building portfolios where a $500M exit is career-defining, not a “meh” return.

The data backs this up. In 2024, over 40% of new VC funds closed with less than $10 million in committed capital (up from 25% in 2020), and 22% were between $25 million and $100 million.

First-time fund managers also tend to have a specific thematic focus. These aren't generalists hedging their bets - they're former scientists and operators building funds around deep expertise.

To understand why this matters for you, let’s take a look at the math.

For a VC to be considered successful, and to have a realistic shot at raising a follow-on fund, they need to return 3-5x to their LPs. In 2025, 2-3x is typically table stakes. Over 5x means you're in the top tier.

Since 50-70% of investments return little or nothing, VCs need outsized wins to compensate. A "fund returner" - a single investment that pays back the entire fund, typically requires an exit worth 5-10x the fund size.

Now look at what actually happens in biotech M&A. In 2024, the average deal size was $2.1 billion, with the largest bringing in just under $5 billion. The vast majority of exits landed between $200 million and $2 billion.

Here's where the math gets interesting:

For a $50M micro-VC fund: A $500M pharma acquisition returns $75M on a single deal (assuming the $500M reflects equity value available to shareholders and ~15% ownership at exit) - that's 1.5x the entire fund from one company. That means that all the other investments from the first fund would be pure upside. For a first-time fund manager, this could be career defining.

For a $2B mega-fund: That same $500M exit returns just 3.75% of the fund. It barely moves the needle. These funds need $10B-scale outcomes (or multiple multi-billion-dollar wins) to matter - and those are rare across biotech in any given year.

So, while you're chasing funds that need unicorn outcomes to care, hundreds of emerging managers are actively looking to deploy capital into exactly the kind of science you're building.

Many of them left ‘safe’ roles at pharma, at larger funds, in academia - because they believed they could do something different. They're grinding at conferences, proving themselves to LPs, betting their careers on being right about something the market doesn't yet see.

What they need most is founders who help them prove that thesis.

What they need is you.

So, remember - they are not doing you a favor by taking your meeting. You're both building toward the same future. And when your platform gets acquired for $500 million and returns their entire fund, you'll both remember who showed up when it mattered.

So you're bought in on the thesis. Now the question becomes: which emerging managers, and how do you find them?

Not all micro-VCs look alike, and understanding the landscape helps you focus on the ones most likely to be genuine partners for your company.

By Fund Structure:

Solo GPs - One decision-maker running the entire fund (about 60% of emerging managers start this way). They can move fast, have high conviction, and you'll always know who to call. The trade-off: limited bandwidth and network compared to a team.

Small Partnerships (2-3 GPs) - A small team with complementary expertise (often one scientific founder paired with someone with operational or financial background). Slightly slower decisions, but more capacity to support you.

By Thesis Focus:

Modality-Focused - Funds built around specific technologies: gene therapy, cell therapy, ADCs, mRNA, etc. They live and breathe your scientific approach.

Therapeutic Area-Focused - Oncology-only funds, CNS specialists, rare disease experts, longevity-focused investors.

Stage-Focused - Some emerging managers focus exclusively on specific inflection points: platform companies at formation, preclinical assets approaching IND, or de-risked Phase 2 assets. Know where you are and find funds that match.

Geography-Focused - Funds that specifically invest in their states or regions. If you're outside Boston or the Bay Area, or in Europe, these can be your strongest allies.

By GP Background:

This might be the most important filter. Ask yourself: Where did the GP come from?

Former Scientists/Academics - Deep scientific credibility, strong academic networks, understand the bench-to-bedside journey intimately. Great for technical due diligence and scientific strategy.

Ex-Pharma Operators - Former BD, commercial, or clinical development leaders. They know what pharma partners actually look for and can open doors you didn't know existed.

Former Founders - Built and exited companies themselves. They've been in your seat. They know what it's like to make payroll, manage a difficult board member, and pivot when the data doesn't cooperate.

Spun-out VCs - Left a larger firm because they wanted to do things differently; often more hands-on, more thesis-driven, or focused on areas their old firm wouldn't touch. Usually have strong investor networks for downstream rounds.

Micro-VCs don't show up in the same places as mega-funds. They're not keynoting JPM or leading billion-dollar rounds that make Fierce Biotech headlines. You need to look where they actually are - which is often where they're fundraising.

LP-Facing Events

This is counterintuitive, but powerful: go where emerging managers are pitching their own investors. They're in active networking mode and far more accessible than they'll ever be at a typical biotech conference.

Emerging Manager Programs & Associations

Trade Media & Newsletters

Social-First Discovery

Pro-Tip: Create a private Twitter/X list called "Biotech Emerging Managers" and add investors and reporters as you find them. It becomes a real-time signal feed.

Pro-Tip: Most LP-facing events are invite-only for fund managers, but many host side events open to the community - be sure to check event websites for these. Also, search the event name on LinkedIn to find attendees posting about attending, then reach out.

The key insight: When you see an emerging manager speaking at an LP-facing event or announcing a Fund I close, they're in active deployment mode. That's your window.

Let's adapt the SIFT framework for this investor class.

SOURCE

Use the strategies above to build a list of 30-50 emerging managers who invest in life sciences at your stage. Cast a wider net than you would for mega-funds - the fragmentation of this market means you want to expand the surface area for your search.

ISOLATE

Look for signals they're actually ready to deploy capital:

Yellow flags: Fund is 3+ years old with no recent investment announcements - they may be fully deployed or in "harvest mode."

Red flags: No clear thesis, fund announced 4+ years ago, or they only invest at later stages than where you are.

FILTER

Beyond the check, can they be a genuine strategic partner? Ask:

TIER

Prioritize by mutual fit:

Tier 1: Thesis directly matches your space, fund in active deployment, GP has domain expertise, check size aligns. These are your priority - move fast.

Tier 2: Adjacent thesis, relevant but not exact GP background, fund timing and size work. Worth pursuing, but after Tier 1.

Tier 3: Interesting GP, but fund may not be actively deploying, or thesis alignment is not as close. Keep warm for future rounds or potential intros.

This week, you're building your micro-VC and emerging manager pipeline. The goal: 40-60 funds in your tracker, with 10-15 Tier 1 prospects and warm intro paths identified.

Target: 25-35 funds

Now go deeper into the emerging manager ecosystem.

Target: 15-20 additional funds, background research on top 15

Filter, tier, and identify your paths in.

Next week, we'll cover established VCs and how to approach the larger funds strategically, even when you're not yet on their radar.

I've put together a single resource to accelerate your emerging manager outreach - a multi-tab spreadsheet covering everything you need to build your pipeline this week.

What's Inside:

Micro-VC Directory - 40 life sciences micro-VCs and emerging managers, including fund size, check size range, thesis focus, GP backgrounds, and direct links. Not exhaustive, but enough to get you moving immediately.

LP-Facing Events - The conferences and showcases where emerging managers are most accessible - because they're the ones fundraising. Dates, locations, and notes on life sciences relevance.

Associations & Programs - Key networks like VC Lab, EVCA, and Kauffman Fellows where you can source additional emerging managers and find warm intro paths.

[Download the Micro-VC Sourcing Kit]

Aaand, an Extra Bonus: AI Research Mega-Prompt - A plug-and-play prompt for the AI agent of your choice that scans the past 12-18 months for new fund launches in your specific vertical. Outputs details about the fund, GP backgrounds, recent deals, and other info in a nice, clean table. Whoever said Christmas can’t come early this year? ☺️

[Grab your Micro-VC Mega-Prompt Here]

You now have a complete playbook for sourcing and qualifying micro-VCs and emerging fund managers.

This week, your job is focused: build your emerging manager pipeline. Add 40-60 micro-VCs to your tracker, apply SIFT criteria, and identify your 10-15 Tier 1 targets with warm intro paths. Remember - these aren't investors doing you a favor. You're both in the trenches and need each other to win.

Next Sunday, we're tackling established VCs - the larger funds with bigger checks and longer processes.

These are the names you probably already know: the $500M+ funds with deep pockets, resources, accelerators, and the ability to lead your Series A and beyond. I'll show you how to approach them strategically, what actually gets you past the first meeting, and when it makes sense to prioritize them over smaller funds.

I'd love to hear from you: Have you ever worked with an emerging fund manager? What's been your experience with smaller versus larger VCs? Hit reply and let me know!

See you next Sunday!

To your success,

- Vadim

PS: Are you an emerging fund manager, or do you know a first-time GP raising their first fund? Let me know - I’d love to see how we can join forces.

PPS: If you have someone on your team helping with fundraising or know another founder who could benefit from this intensive, forward them this email. They can sign up to join us here: [Join the Intensive]