How can an LP write an evidence-based review of a pre-seed venture fund?

An LP review should connect the manager's claims, the evidence, the economics, the operating model, and the unresolved risks. Record competing interpretations rather than only the preferred thesis. Keep the fund-specific assessment separate from a personal suitability decision.

Start with the decision

Organize a memo around strategy, attribution, portfolio construction, terms, operations, references, and open questions. Identify which evidence would change the conclusion. Use qualified advisers for legal, tax, accounting, and allocation questions.

The illustrative scenario

This is an educational workbook. The company or fund and all numerical inputs below are fictional. They are not ADIN results, customer claims, market benchmarks, or a forecast.

The fictional fund plans small initial investments before companies have repeatable revenue. It expects to reserve capital for selected later rounds. The LP is reviewing whether check sizes, ownership assumptions, and support work fit the fund budget.

Early paper marks can move before meaningful liquidity. Separate investment selection, subsequent financing, ownership dilution, and cash distributions when discussing progress.

Turn the scenario into an evidence decision

Consider a review of a pre-seed venture fund in which a confident explanation arrives before the supporting records. Start with the first question in the table. Write down what an answer would change: the next interview, the experiment's scope, a request for specialist review, or a decision to wait. A question without a consequence can produce a longer document while adding little understanding.

Next, inspect the record named in the table and record its date, owner, permission boundary, and limitations. Request the portfolio model, reserve policy, ownership assumptions, dated company evidence, and a reporting sample that distinguishes marks from cash. Include companies that failed or did not raise again. If the record contradicts the explanation, preserve both accounts and ask which definition, period, or workflow differs. Do not silently select the version that makes the opportunity look strongest.

Finish with a conditional statement: if the specified evidence supports the claim under these conditions, take the named next step; otherwise investigate the unresolved question. A memo preserves reasoning and supports a decision process; it cannot certify a fund or predict results. Clearly labeled unknowns are more useful than filling every section with confident but unsupported assertions. This worked exercise is about the decision process. It does not assert that a fictional company has met a real diligence standard or that a template can authorize an investment.

Use this worksheet

Answer the questions with a source, date, owner, and next action. Mark an unknown as unknown. Use public or permissioned information and involve a qualified specialist when a question requires expertise beyond the team’s competence.

1. What is the proposed strategy?
2. What evidence is attributable?
3. What terms remain unresolved?
4. What is the contrary case?
5. What would change the conclusion?

Questions specific to this scenario

• What is funded by the first check?
• Which follow-ons qualify?
• How are unsuccessful investments represented?

Request the portfolio model, reserve policy, ownership assumptions, dated company evidence, and a reporting sample that distinguishes marks from cash. Include companies that failed or did not raise again.

A concrete next test

Rebuild the initial-check and reserve model with a smaller final close. Ask which portfolio assumptions change and what evidence supports the ownership target. Compare early company milestones with paper marks so the LP can distinguish learning progress from cash realization.

Interpret the result

A memo preserves reasoning and supports a decision process; it cannot certify a fund or predict results. Clearly labeled unknowns are more useful than filling every section with confident but unsupported assertions.

Compare the proposed number of companies with investable capital after the model's costs and reserves. Treat a target ownership percentage as an assumption until terms support it.

Sources and method

These primary resources provide background for the concepts. The fictional scenario, calculations, and worksheet are ADIN educational examples; the sources do not report or validate those invented results. Reviewed October 11, 2026.

• ILPA: Due Diligence Questionnaire user guide
• Investor.gov: Private Equity Funds