Raising my first fund, what do investors look for? Pros/Cons vs a JV

Recommend looking up emerging manager programmes, good luck! 

Second-hand knowledge, but have been told one thing that helps in raising a fund is seeding it with investments. So that would look like 2-3 deals that were acquired through JVs, some seasoning showing execution of biz plan, and then contributing them into the fund. Gives investors a peak and gives a small track record.

Firstly, gotta echo @CREnadian - if you have to ask a question this basic, you are another decade away from being ready for this.

Putting that aside - you've got ten years of experience and therefore at least some marginal amount of competency using a co-GP structure.  What in the world are you thinking, trying to reinvent the wheel?  Do what you're good at!  Raising a fund is hard, and there is a ton of reporting and back office functions which you don't understand and therefore can't do, and since you are starting out, you can't even hire someone to do it for you, since you can't afford them and can't vet their competency, either.  

Very few people or institutions are going to want to invest with you if it is a fund structure.  It's not a ton of money, you don't have a track record, you don't even have relevant work experience... someone else is going to come along with a pitch and have the chops to back it up.  Stick to JVs and build up a network from there.  Once you've got the trust of those partners, then think about raising a fund with their recommendation as a tailwind.

Based on the limited information you've provided, it doesn't sound like you're in a strong position to raise a fund in the manner you described. Here's what I would consider instead:

- Firstly, are you going to focus on acquisitions or development? Leads to a very different assessment of the amount of capital you need to fund your life while being able to fund pursuit costs that may take a while to recoup, dead deal costs, how you're able to recycle capital, etc.

- Too few people talk about this, because they seem to focus only on the equity, but are you actually bankable from a lender's standpoint? Meaning: can you meet the net worth and liquidity checks for non-recourse carveouts? And do you have the credibility, besides that? And if you're going to do development, are you able to convince a lender your completion and carry guarantees mean anything?

- What could work, depending on your personal relationships and how much net worth and liquidity they have, is to raise a very small pool of friends and family discretionary capital to fund pursuit costs and provide for working capital, earnest money deposits, etc.

- Then do an individual JV, and then another, until you start graduating to the point where you can more convincingly look to do something more programmatic

- At that point, bring on a co-GP, and if you need credit enhancement, there are groups out there that will do that for a fee; that co-GP may also be able to raise the LP equity for you, or syndicate it, if that's part of the arrangement

- Try to get to the point where you can structure a programmatic LP JV once you achieve some further success; particularly if this super secret "very specific business plan" you have actually has some secret sauce, then a program makes sense; alternatively, if you find a family office you could craft a strategy for them and execute it through a separate account

- Only at a much later date, consider raising fully discretionary capital in the form of a fund--or never; there are plenty of very mature sponsors who never do, fund management is a full time job

Going to give a serious answer and not take the piss out of you as the other comments have:
 

As others mentioned, without age/seniority/ people trusting you it’s very hard. You need a track record. But that reasoning gets pretty circular fast—can’t raise, unless you have a track record, can’t get a track record until you raise.

So the alternative is being trustworthy because what you say makes sense by developing a thesis people want exposure to and a “track record” for why you are the right guy. As an example, we invested with a guy who knew an emerging market’s real estate very well. He lived in that country until business school and his thesis was the instability in the country presented a buying opportunity that was actually resolving if you knew the country well enough, but the world hasn’t caught on. He clearly outlined regions and why they were discounted including things like rent growth over the years and the fact that some areas he needed shockingly low occupancy to break even and that was very modelable and reasonable growth to expect. He acknowledged there was risk with the country going to shit again, but he didn’t think so. We had no exposure to international real estate, liked the guys thesis, he was very diligent and smart, and everything he said just made sense. So we invested. He’s done solid.

Really hard to raise a first time fund if you don’t have any special edge. My question for you would be why the hell should I give you my money when a ton of other people have way more experience and resources and are probably better than you are. What unique thing are you doing that I can’t find someone else who is doing the same thing but is on their 5th fund?