Used to be, managers, partners and founders had to shell out 2% to 3% of the fund’s total assets—millions of dollars—in order to get others to come on board. But today, there are other ways to raise the initial capital investment.

Seek out limited partners who are willing to accept less than the traditional 2% or 3%, and perhaps even less than 1% of the overall fund size being targeted. While that may be a challenge, it is certainly worth pursuing.

A more reasonable approach is management fee offsets. Simply put, you convert fee income into the investment you’re supposed to make. How about opting to use your existing portfolio companies as collateral, offering ownership stakes that bring value to the investment table? Have a rich uncle or friend? One venture capitalist raised capital from six friends with the added perk of a percentage of the company.

Of course, there’s the traditional bank loan. There are pros and cons associated with funding a commit through a bank loan, however. Joanna Rupp, who runs the $1.1 billion private equity portfolio for the University of Chicago’s endowment, says “...There’s no guarantee a fund manager will make money from a fund. A loan adds risk on top of risk, and should a manager need liquidity related to that loan, he or she might sell a strongly performing position too early.”

Others look on bank loans more favorably, especially with those banks that have venture capital relationships already in place. They’re happy to lend a fund manager a line of credit in exchange for winning over a new fund’s business.

Another option is blending your annual management fee of 2.5% of assets under management and paying yourself a higher percentage—5% for each of its first three years—until by the end of the fund’s life, you’re receiving no management fee at all. Chances are, you’ve raised another fund by the time that happens so you have resources coming in from a second fund.

You can also use a self-directed IRA to finance the commit. Or you can sell a portion of the management company or a greater percentage of your carry and use those proceeds to pay your commit.

“It’s an exciting time for fund managers as well as investors,” says Jeremy N. Krell, DMD, MBA and Managing Partner of Revere Partners, the first and only Venture Capital Fund in the oral healthcare space. “With so many ways to fund the commit, it’s a level playing field for any and all who want to start a fund.”