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5,000 LPs? Here's What That Actually Looks Like in Dollars & Deals

Our syndicates (Riverside & Calm) boast over 5,000 Limited Partners (LPs), a number that might seem staggering at first glance, especially when compared to traditional venture funds. However, it's worth exploring what this actually means for our organization and the broader high LP, high volume SPV landscape.

This week, we're diving deep into the Riverside syndicate's LP data to shed light on investor activity and behavior. Our goal is to demystify the world of Limited Partners in a syndicate like ours, providing concrete insights that go beyond mere vanity figures like the number of LPs that are often touted but often misleading. The reality is the 5,000+ LP figure doesn't paint the full picture. We've realized there's a significant knowledge gap about who these LPs really are, their investment patterns, and the dynamics of their participation.

In this analysis, we'll break down:

1. Check sizes: What's the range and distribution of investment amounts?

2. Investment frequency: How often do our LPs participate in deals?

3. Engagement levels: Which LPs are most active, and why?

4. LP growth: At what pace is Riverside Ventures’ LP base growing? 

Let's dive into the numbers and stories behind Riverside's LP community, moving beyond the headline figure to uncover the real dynamics at play.

As I write this piece, Riverside Ventures has 5,353 LPs. It is important to note, that I DO NOT share deals we syndicate with everyone in the syndicate. I’d argue that I DO NOT share deals with most LPs as I really want to focus on those folks who are active and have invested in deals.

Of Riverside’s 5k+ LPs, unfortunately many used to be active in previous years but that has slowed. The only place I share deals with every single LP/subscriber is Deal Sheet :) I guess you could call it our premium syndicate product!

Let’s get into it.

# of LPs who have invested in Riverside Ventures:

• Invested in 1 or more deal = 2,940

• Invested in 2 or more deals = 1,649

• Invested in 3 or more deals = 1,076

• Invested in 4 or more deals = 785

• Invested in 5 or more deals = 558

• Invested in 50+ deals = 6 (I am one of the 6) 

• Most active LP = 102 Deals

I asked my Last Money In partner Zach to share his data. He has had 4,625 of his 7,217 LPs (or ~64% of his LP base) participate in a deal. 

My Takeaway → We’ve been doing this for a while so these numbers add up. I guess I am happy that over 50% of the folks in our syndicate have invested in a deal. I’d be curious to know if other syndicates have had over 50% of their LPs invest in a deal or not. A particularly compelling statistic is that over 1,000 of our LPs have participated in three or more deals with us. This figure is significant for several reasons:

1. Sustained engagement: It indicates that a substantial portion of our LP base is actively and repeatedly engaging with our offerings, rather than making one-off investments.

2. Portfolio building: These LPs are likely adopting a strategic approach, building diversified portfolios across multiple deals rather than putting all their eggs in one basket.

3. Trust and satisfaction: Repeated investments suggest a level of trust in our deal flow and satisfaction with our process, which is crucial for long-term syndicate health.

4. Commitment to the asset class: It demonstrates that these LPs are committed to startup investing as a meaningful part of their overall investment strategy.

I checked with Zach on his # of LPs in 3 or more deals, and it landed at 2,635 LPs. He’s had a single LP invest in 283 of his SPVs. 

My hope for Riverside is that over time we can have 1k+ LPs that have done a minimum of 5 deals with us. 

LP Median check size:

• 10k+ average deal commitment = 314 LPs

• 20k+ average deal commitment = 131 LPs

• 30k+ average deal commitment = 53 LPs

• 40k+ average deal commitment = 46 LPs

• 50k+ average deal commitment = 40 LPs

• 100k+ average deal commitment = 15 LPs

My Takeaway → I think many might be surprised how small a ton of LP checks are. Again, everyone compares this to venture funds and syndicats are just going to have smaller checks from LPs who are almost all investing individually, and typically smaller amounts.

When we say you can angel invest with as little as $1k, we are not kidding, it’s really true. As you can see above, many do! If we have had 2,940 LPs invest with us and only 314 LPs average above $10k per investment, then we have many LPs investing in the $1k to $10k range, which is where most LP commitments land per deal. Again, this likely sounds like small dollars but this category is core to our syndicate and core to our focus with Last Money In and Deal Sheet to democratize the asset class.

While I feel this seems like a small check to many outside the syndicate ecosystem, I think it is a good thing if this is because LPs are building larger portfolios to spread out their capital commitments across 10-20-50+ deals over the years. It’s also safe to say that many of these LPs have similar commitments with other syndicates, so it’s not that their entire portfolio is composed of our deals and rather 3-5-10-20+ syndicates. This is the right way to tackle early-stage investing as an angel/syndicate LP in my opinion.

Total Capital Committed by Riverside LPs to Our Deals: 

• at least $25k = 450 LPs

• at least $50k = 195 LPs

• at least $100k = 81 LPs

• at least $200k = 30 LPs

My Takeaway → This means of the 2,940 that have invested with me, 2,184 have invested under $25k with me in total. Once again, this shows that there are tons of LPs investing smaller dollar volume here for better or for worse. 

Our LP base appears to span a spectrum, from serious portfolio builders to hobbyists. The former group is likely playing the long game in venture capital, seeking outsized returns through consistent, strategic investments and implementing a somewhat strict portfolio strategy and criteria. The latter may be dipping their toes in, backing interesting deals here or there. Between these extremes, we're noticing an intriguing middle ground: newcomers who start cautiously but gradually increase their involvement as they gain confidence. This diversity in our LP makeup raises important questions about engagement strategies, deal flow management, and how we can effectively cater to varying levels of commitment while maintaining a cohesive syndicate.

20% of our LP base makes up ~80% of capital invested → Our LP base distribution mirrors the Pareto principle often seen in VC returns: approximately 20% of our LPs account for 80% of our total capital invested. While VCs apply this 80/20 rule to portfolio returns, we see it in capital deployment. This core 20% essentially serves as our anchor LPs, driving the majority of our syndicate's investments. 

Again, the overall 5k+ LP figure is pretty large, but the vast majority of the capital is coming from ~10% of my LP base.

# of Riverside LPs YoY:

• 2020 = 943 LPs

• 2021 = 1,312 LPs

• 2022 = 3,235 LPs

• 2023 = 4,011 LPs

• 2024 = 4,585 LPs

• Present = 5,353 LPs

My Takeaway → It feels that growth has been mostly consistent over the past 5 years. I do think before EOY 2021 everything was happening at a faster pace whereas everything has slowed since 2022. Despite slower LP growth and capital flowing into the ecosystem in 2022, we’ve managed to stay active, stay relevant, continue writing checks, growing the LP base, and actively sharing deals via Riverside.

I do think we’ve picked up a lot of valuable (top 10%) LPs in the recent year or two which has really helped as many folks have slowed due to limited liquidity. So while we are not in “boom” times for syndicate leads, we’ve pulled through since 2022 and pushed forward. 

Many syndicate leads slowed either way more drastically or completely left the ecosystem, so continuing to grow here is something to be proud of (versus what I suspect across the syndicate ecosystem).

Investment Rate:

• >5% of our deals = 152 LPs

• >10% of our deals = 74 LPs

• >20% of our deals = 21 LPs

• >30% of our deals = 7 LPs

• >40% of our deals = 2 LPs

My Takeaway → It’s a low hit rate, but it should be given the high deal volume (over 300 SPVs closed to date). Our LPs need to be selective with the high volume deals we do and each LP has a different strategy (i.e. some like pre-seed consumer deals, others invest in pre-IPO b2b software). Of course, I’d love to have a higher investment rate here but I also think that might be unrealistic. Also, some of this data might be skewed. As an example, someone who was active with us in 2020-2022 might not be investing as of the past ~2 years, so their investment rate likely dropped. There are lots of periods where LPs are investing more or less. It would be better to have more data on investment rate during the period of time that these LPs are active.

Conclusion → This deep dive into Riverside Ventures' LP data reveals a nuanced picture of our syndicate's composition and activity. Far from the simplistic narrative suggested by our "5,000+ LPs" headline figure, we've uncovered a diverse ecosystem of investors with varying levels of engagement and commitment.

Key takeaways include:

1. Active participation: Over 50% of our LPs have invested in at least one deal, with over 1,000 participating in three or more deals. This suggests a healthy level of engagement and trust in our deal flow. Other high volume syndicates may have anywhere from 5% to 70%+ of their LP base invest depending on how active the GP is with new deals. Smaller syndicates (say those with <50 LPs), may have ~100% LP participation in their deals. Of note, the smaller syndicates may cater to larger LPs (say those writing $250k to $20m+ checks) and may have AUM that surpasses those syndicates with many LPs (e.g. 5,000+). 

2. Check size diversity: While we have a core group of high-volume investors, the majority of our LPs invest smaller amounts ($1k-$10k range) per deal. This aligns with our mission of democratizing access to venture capital. We take this a step further with Deal Sheet, and if you’re an active venture investor, we highly recommend you sign up given the deal access and carry discount associated with being a Deal Sheet subscriber.

3. Spectrum of involvement: Our LP base spans from serious portfolio builders to occasional participants, with an intriguing middle group of newcomers gradually increasing their involvement.

4. Consistent growth: Despite market fluctuations, we've maintained steady growth in our LP base year over year, adapting to changing conditions and attracting valuable new investors. This is heavily contrasted to much of the SPV ecosystem, which has had a large number of GPs leave entirely or decrease their deal volume 90%+. 

5. Concentration of capital: About 20% of our LP base accounts for approximately 80% of the capital deployed, highlighting the importance of nurturing relationships with our most active and largest investors. 

If you enjoyed this article, feel free to read our prior adjacent articles on this topic including: 

• Deal Machine or Selective Investor: Which Syndicate Style Wins?

• Want Access to Tier1 Venture Opportunities? Try Deal Sheet for Free Today!

• We Have >6,500 LPs & It’s a Total Vanity Metric

• Letter to LPs - Why You’re Not Getting My Venture Capital Deal Invites

Last Money in is Powered by Sydecar

Sydecar empowers syndicate leads to manage their investments more effectively. Organize, manage, and engage your investor network effortlessly with Sydecar’s management and communication tools. Their platform also automates banking, compliance, contracts, tax, and reporting, freeing up syndicate leads to focus on securing deals and strengthening investor relations. Elevate your syndicate operations with Sydecar.

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✍️ Written by Zachary and Alex