Want LPs to invest? Watch your language: 'Don't say the word impact in the US'

David Frykman, general partner at Norrsken VC, which raised a €320m fund in 2024 and is now preparing its third, has a blunt warning about leading with the word "impact" when fundraising in the United States.

"If you meet an American LP and you open with 'we're an early stage impact investor' – they're gone," he told an audience at an Impact Loop meetup last week.

The fix? Adjust the language, Frykman says. Norrsken VC now leads with solving "the world's biggest problems" – which also happens to mean the world's biggest business opportunities.

Lead with AI – everyone wants in

One practical tactic Norrsken VC uses to attract LPs is to mention its recent investments in AI. It opens doors, says Frykman.

Magnus Skåninger, CEO of Swedish state fund Saminvest, a major backer of impact VCs in the country, agrees that the industry's branding has shifted fast.

"You lean much harder on efficiency now, and a lot on resilience, which is really just another word for the same thing as impact," he says.

For Saminvest to commit capital, a good pitch isn't enough. Skåninger outlines what he actually looks for: a strong track record, a diverse team (40 to 60% women), and a clear case for why there is a funding gap in the fund's chosen niche.

Presentation matters too. Fund managers need to tell "the whole story properly" and document exactly what value they have historically created in their portfolio companies, says Skåninger.

'The third fund is almost entirely driven by results'

The difficulty of fundraising tends to follow a predictable arc, according to Frykman.

"They say the first fund is brutally hard. The second is relatively easy. The third is almost entirely driven by results," he says.

When it comes to choosing which LPs to bring on board, stability is the priority. Frykman offers a counterintuitive warning about two popular capital sources: family offices and corporates.

"They can be tricky because they come and go. Corporates too. They're interested in a space for a period, then they disappear by the time you're raising your next fund – and suddenly you're stuck," he says.

Name-dropping won't get you far

For an institutional LP like Saminvest, a gender-balanced team and proven expertise are necessary but not sufficient. You also need a credible, lengthy list of committed or interested investors – and casual name-dropping falls flat.

"It's not enough to say 'I know so-and-so at one of the AP pension funds' and leave it there. You need a fairly long list mixing institutional, private, and smaller players," says Skåninger.

The panel's conclusion was clear: landing LPs requires playing the long game and building relationships over time.

"Some LPs – if you meet them today, they might make their first investment in ten years," says Frykman.