Why Emerging Managers Drown and How to Avoid Their Fate

After ten cohorts in their accelerator programmes for emerging impact fund managers, Accelerating Impact dives into the lessons learned and uncovers three traits successful managers share, and three pitfalls unsuccessful ones met

Most first-time impact funds don’t die because the world lacks problems to solve, or even because the fundraising environment is so tight. They die because the managers run out of oxygen before the first close.

After seven years and ten cohorts of Accelerating Impact’s acceleration programs for emerging fund managers—the International Climate Finance Accelerator (ICFA) and the International Social Finance Accelerator (ISFA)—we’ve watched nearly fifty teams navigate the deep, dark fundraising sea. Some now manage real capital and generate real returns and real impact. Others who were just as smart, just as mission-driven, and just as motivated sunk.

When we excavated these successes and failures and sifted through the data beneath, it pointed to a few clear truths. It’s not (only) about hard work and great story telling or even the returns you promise. Survivors held to three working knots, and failures shared three predictable leaks.

If you’re raising your first fund in 2026, here’s what our cohorts of first-time fund managers wish they knew on day one.

How to Swim

1) Small Boats Launch Faster

Smaller marine craft are lighter, have simpler systems, need fewer crew and permits, and are cheaper to kit out, so they get into the water sooner. The trade-off of course is range, payload, and blue-water comfort. This is the same for small first funds: quicker to launch, easier to prove, but not built for transoceanic voyages just yet.

The managers who get to yes almost never open with a $100 million pitch deck and a prayer. They launch a pilot vehicle, a small evergreen sleeve, or a proof-of-concept portfolio that buys them the two things the market demands and emerging managers do not have: evidence and time. Our managers who have closed under USD 10 million or implemented rolling closes were able to start investing and built their footprints across their sectors while most of their first-time peers were still revising their data room and running out of money. A first vehicle is not about scale but about establishing that your ship runs.

2) Their Ship Has an Anchor Before a Deck

You’ve begun fundraising long before you even think of raising a fund. Our most successful closers didn’t “build a network” during the raise, they brought one with them. Your team’s network is one of the most important assets you have.

Early champions within DFIs or strong ties to coalitions of family offices create a centre of gravity for successful fund managers that pull in other LPs. As frustrating as it is, LPs would much rather follow than lead and, more often, progress with interested LPs is completely stalled until an anchor is found. This is the unfortunate physics of fundraising: mass attracts mass. So how do you find this lead? Networks compound like capital: systematize coffee chats, conference panels, and peer referrals to build a web with the greatest possible capture.

3) The Crew Has Sailed Together Before

Fundraising is a three-year (often longer) exercise in constant rejection. You need resilient co-founders who can disagree without detonating and divide work without duplicating it. In our portfolio, teams with pre-existing working relationships that have already been tested under pressure were more likely to reach first close. In a first fund, the team is the product you’re selling. LPs underwrite your partnership long before they model your pipeline.

Before you fundraise, build a business model for the GP itself. Codify roles and decision rights, document the operating cadence, and set a commitment plan. If you don’t chart your passages in a navigational plan up front, you’re unlikely to have the chance to “sort it later” when the seas get rocky.

How to Sink

1) The Crew Has No Provisions

There is no faster way to fail than to run out of money. As stated above, success stories codified their partnerships at the beginning and a crucial element of a successful business model is a financing plan. Unless you ensure 24–36 months of financial runway including salaries, you won’t last long enough to reach land.

Emerging managers almost always underestimate both the time and financial costs of reaching a first close. Then, when funds run out, teams fall apart or pivot. Management companies running on sweat equity who run out of capital inevitably turn to sporadic consulting revenue or other mandates. Too often, these competing commitments take over and the fund stalls.

2) The Team Fragments Under Strain

Talented founding teams splinter over vision, risk, economics, and just plain exhaustion. We have seen partnerships break because of fundamental misalignment on the fund strategy, interpersonal conflict, and simple changes to life plans, but lack of provisions is a leading cause for these breaks. Insufficient finances, coupled with a lack of formal business plan for the fund manager, pushes an already strained relationship to breaking point.

And this problem escalates quickly. Once the partnership looks unstable, LPs step back—and word travel fast. Those governance basics that successful teams implement at the beginning (clear roles, decision rights, separation plans) sound as unromantic as a prenup, but they’re also the cheapest de-risking tool you have.

3) Strategic Drift Sets In

When the course isn’t set at the start, drift is inevitable. If partners do not 100% align on the fund’s mission and objectives, it becomes nearly impossible to re-find their course.

Even then, when months stretch to years, it’s tempting to pivot to where you think the money is. And sometimes, that is valid. But often strategic drift is the inevitable effect of a team under pressure.

In our discontinued pool, nearly a third flagged a significant strategy change as a contributor—often triggered by the cash crunch or team dynamics, not by market insights. Pivot when facts demand it, but don’t chase rainbows. Geography shifts, asset-class detours, rebrands to pander to a new LP—each move signals uncertainty more than flexibility.

And your strategy may be less problematic than you think. We found no reliable pattern by sector, geography, or IRR. Africa vs. Latin America vs. Asia; agriculture vs. renewable energy vs. nature-based solutions—none of these variables separated winners from non-finishers.

But Beware the Three-Year Trench

If a fund has not reached close within approximately three years of launching fundraising, its thematic and strategic relevance begins to decay and the probability of reaching close declines precipitously. When we plot the outcomes across cohorts, a stark line appears. Nearly every fund that was going to succeed reached first close within about three years of starting the raise.

If you’re thinking “this sounds structural,” you’re right. Most emerging managers don’t fail because strategy is weak or the team lacks the skills, they fail because the pre-close corridor is riddled with underwater hazards. LPs want track record, track record requires funding to build, the GP can’t finance the gap, and the team disintegrates.

Setting Sail

Programmes like our accelerators are working to address some of these challenges, but fund managers can still position themselves to navigate the open water as much as possible.

As we open applications for our 2026 cohorts, we’re looking for feasible strategies, early traction, teams with demonstrated cohesion, and structured business plans. We back ideas that can compound into systems change, but in first funds, durability is impact’s prerequisite. You must last long enough to get to work.

We wish you fair winds and following seas!

Applications for ICFA 11th cohort (2027) will open in October. Applications for ISFA’s 3r^d  cohort (2027) will open in January 2027.  

To become an ISFA Cohort Member, and take advantage of the programme benefits, Fund Managers are selected through a highly competitive, three phase selection process, first by the Accelerating Impact team, then an independent consultant, and finally by our Selection Committee.

To highlight the competitiveness of the programme, for the inaugural ISFA Cohort in 2025, we had 32 eligible applicants for the ICFA programme and selected only 4 high-impact, innovative fund managers to be part of the 2025 Cohort.

Selected fund managers receive access to financial support, trainings on a wide range of topics, an expert coaching, and many other benefits. To find out more, visit our dedicated ISFA programme website or watch our informational webinar recording.

Please note: The ISFA programme aligns with the selection process of its sister programme, the ICFA, by requiring additional documents at the Expression of Interest phase.

We’re delighted to announce that Femke Bos, Director of Impact Private Debt & Equity at Triodos Investment Management, has joined the 2025 ISFA Selection Committee.

With over two decades of experience in impact investing and development finance, Femke leads investments in financial inclusion, the energy transition, and the food transition across emerging markets and Europe. Her expertise in private debt and equity strategies is grounded in a deep commitment to using finance as a force for systemic change.

Femke's invaluable insights and expertise in impact investing contribute to identifying fund managers who can make a real difference in achieving global targets. Her leadership and dedication shape the course of ISFA's mission, ensuring that we support innovative solutions and emerging fund managers focused on creating positive societal impact.

Femke shares,“I am honored to join the ISFA Selection Committee in Luxembourg. I look forward to accelerating the work of fund managers dedicated to addressing societal challenges and delivering measurable positive impact for people and the planet.” 

 🎉We’re thrilled to have Femke Bos’s insight and leadership guiding the selection of fund managers who are shaping a more inclusive and sustainable future. 

We are delighted that David Walker has joined the ISFA - Selection Committee 2025!

David Walker is a seasoned impact investment professional who has dedicated three decades to pioneering fund development and deployment across diverse sectors. His extensive experience includes leadership positions at premier institutions: Deputy Head of Equity Fund Investments at the EIF, Head of Infrastructure Funds in the Climate Change and Environment Division of the EIB, and Director of Private Equity at BMO Global Asset Management. Throughout these roles, he consistently demonstrated expertise in structuring and managing complex investment mandates that deliver both financial returns and meaningful impact.

His expertise spans impact fund creation, infrastructure finance, venture capital, private equity investment, and cross-sector portfolio management. David's current influence extends through his advisory role with Asper Investment Management, Outrigger Impact, and WWF (Scotland), where he continues to shape the evolution of sustainable finance and environmental impact investing.

David shares, "Accelerating Impact has already made waves in impact finance—now 2025 marks a bold step into social finance with the first-ever ISFA cohort. It’s a real privilege to be part of this landmark year, backing a new generation of impact finance leaders looking to shape a fairer future." 

We're delighted that Petri Kuusisto has joined the ISFA – International Social Finance Accelerator Selection Committee for 2025! 

Petri Kuusisto is an investment leader with over three decades of executive experience managing large-scale global portfolios across Finland, the Baltics, and the Middle East. As CIO for a Sovereign Wealth Fund, he oversaw strategic investments and managed an innovative USD 6 billion sharia-compliant treasury. Most recently, he has focused on originating, developing, and financing large energy transition projects across Eastern Europe and Finland using sophisticated blended finance structures.

His expertise spans ESG/Impact investing, fund design and launch, capital raising, and innovative financing structures. As a serial entrepreneur for 18 years, Petri has successfully launched and exited two asset management companies while working across consulting, financial services, natural capital (timberland), and real assets. He designed, launched, and managed several funds including EM/Frontier Equity Funds (Luxembourg) and raised capital for these and other investment vehicles. His influence extends through his UN consulting work on social impact bonds and his role as co-founder of the Impact Innovation Institute, a for-benefit entity focused on research and advisory services.

Petri's passion for catalysing change of mindset within investments and finance perfectly aligns with ISFA's mission to scale social finance innovation. His upcoming article "Towards Sustainable Portfolio Theory" (to be presented at World Resource Hub in September 2025) demonstrates his thought leadership in defining the future of innovative investing and finance.

Petri states, "Great to see Luxembourg taking emerging social entrepreneurs into focus and hence helping this ecosystem to grow. I am humbled to serve on the selection committee." 

We are confident that Petri’s strategic insight, entrepreneurial leadership in ESG and blended‑finance investments will significantly reinforce ISFA’s mission to identify and nurture the most promising fund managers who share our commitment to social impact. 

We are thrilled to announce Lauren Burnhill as Chair of the ISFA - International Social Finance Accelerator Selection Committee!

Lauren Burnhill is an investment practitioner with over two decades of work in social and impact finance. She began her career with structuring the world's first 100% private commercial microfinance bank (BancoSol, Bolivia) at IDB Invest, followed by designing ProFund, the world's first microfinance investment vehicle (MIV) with a mission to invest in the transformation of non-profit organizations into sustainable microfinance institutions. After her time in project finance at Barclays Bank/BZW, Lauren joined Accion International as Chief Investment Officer, where transactions she led for the $10 million Gateway Equity generated more than $180 million+ enabling ACCION to build a financial powerhouse. She launched the first financial inclusion technology and infrastructure fund with only $5 million in capital, investments from which were later spun off for the launch of  Quona Capital, which now manages more than $700 million at the financial inclusion-technology nexus. She also created an innovation fund of funds investment vehicle for Accion, enabling the organization to take anchor investment roles in new financial inclusion and social impact funds in India, Africa, and Latin America.

In 2009, Lauren founded One Planet Ventures, with a flagship project structuring the Microbuild fund for Habitat for Humanity International, advising corporates, non-profits, and DFIs on social impact funds and sustainable finance. She sits on the Investment Committee of the Helenos Fund, a Pan-European impact private equity fund that invests primarily in financial institutions and fintechs serving micro and small businesses, particularly in rural areas and underserved sectors such as agriculture. She also sits on the Investment Committee of FSDAi's Nyala Facility, which invests in early-stage local capital funds in Africa with a gender lens focus.

Lauren's passion for social impact as well as climate adaptation and resilience for vulnerable market segments (women, SMEs, youth, indigenous populations) makes her an invaluable addition to the ISFA Selection Committee. As she emphasizes:

 "Climate resilience is critical for the survival of planet Earth and ICFA has been advancing climate finance for years. Unless you think we're doing that to save the cockroaches, we need to advance social resilience with equal urgency, which makes the ISFA a brilliant addition to the Accelerating Impact family. I am honored and excited to join the ISFA Selection Committee this year to help catalyze a more equitable and inclusive future."

Join us in celebrating Lauren Burnhill, whose leadership and expertise will guide the ISFA in identifying and empowering the next generation social impact fund managers.