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.

Fill out our unique form to get to the top of the line here.

Deal Sheet now offering a FREE TRIAL for accredited investors!

We are excited to offer a free trial to interested Deal Sheet subscribers. This will consist of a 14 day free trial to see the quality of deals and explore becoming a subscriber. 

Deal Sheet provides accredited investors: 

1. Access to some of the best startup opportunities across the VC syndicate ecosystem (est. 150-200 deals on Deal Sheet per year) and 

2. All Deal Sheet deals come at discounted carry – all opportunities on Deal Sheet are listed at 10% carry (versus 20% standard) with select opportunities (at our discretion) at 0% carry. 

Join the free trial today here!

The Future of Syndicate Management: Inside Sydecar's New Platform 

Given that we run a newsletter all about syndicates, we’re often asked about the best platform to use to manage your syndicate and SPV operations. With Sydecar’s launch of its new syndicate product, we felt this was a great time to cover this topic. The majority of this piece will focus on Sydecar’s new product, but we’ll also share some thoughts about which of the main syndicate platforms (Sydecar and AngelList) you should consider based on your needs. 

Sydecar has been around for years, offering an easier way for emerging VCs to launch and manage SPVs and funds. Today, they’ve launched their syndicate product. For the first time on Sydecar, GPs will be able to: 

• Seamlessly communicate with syndicate members/LPs, with all of their updates, deal flow, and successes shared in a few clicks

• Maintain full ownership of their contacts; all LP information is kept private from other syndicate leads and your LPs have a dedicated portal to view deal flow and communicate directly with you

• Access analytics on member participation, allowing you to identify and target engaged LPs for future opportunities

Having run many SPVs on Sydecar and having received an in-depth look into how the product works from their product team directly, these are some of the pros and cons to understand. 

Pros: 

• End-to-End Syndicate Management: The new product allows GPs to manage all of their syndicate operations in one place, as opposed to just being an SPV platform. The syndicate product includes new features such as contact management, syndicate member updates, LP analytics, and direct messaging within the platform, among others. We’re particularly excited about the ability to have all of our contacts in one place, allowing us to move off email and completely onto their dedicated product with stored data, messaging, and the like. Sydecar is extremely customer focused, and we have high confidence they’ll continue to be aggressive in adding new features GPs/LPs want over the coming year. 

• Low Syndicate Fees: Sydecar’s flexible pricing model is a huge draw for anyone looking to set up SPVs, but especially syndicate leads. The company charges a one-time, all in fee between $4,500 to $12,500 per SPV. If you’re putting together a small SPV (e.g. under $150k), the cost to your LPs is manageable, especially as compared to the large fund administrators, who may charge 2-3x as much. Many syndicate leads opt to do a higher volume of deals with a lower check size (especially at the early stages), and Sydecar’s fees make this not only possible but easy. For large SPVs (e.g. $10M+), Sydecar's fund admin fees end up coming out to only ~0.1% of your entire allocation, so essentially a rounding error. 

• You Own Your LPs: Sydecar has opted against the traditional marketplace model to allow GPs to maintain control and ownership over their relationships with LPs. This approach aligns with Sydecar's goal of providing a private platform where investment opportunities are only visible to individuals personally invited by the GPs. It also ensures that GPs can cultivate and manage their investor networks without interference from the platform, which does not promote investments with other syndicates or venture capitalists. Sydecar allows GPs to focus on building and nurturing relationships with their LPs, which is crucial for long-term success in venture capital. In short – your LPs are your LPs and they will not be solicited for other products/services to other GPs. 

• Automation: Sydecar's platform automates many back-office operations, such as banking, compliance, contracts, tax, and reporting. This automation reduces the administrative burden on GPs, allowing them to concentrate on deal-making and relationship-building, which are essential components of successful venture capital operations. By simplifying these processes, Sydecar aims to democratize access to venture capital and make it more transparent and accessible to a broader range of investors. This piggy backs on the first point on cheaper fees – this automation enables much of this. 

• Support for Double-Layer SPVs: There’s no doubt that an increasingly larger part of the market has moved toward double-layer SPVs, given many high-profile startups have been inaccessible through direct access like OpenAI or Anthropic. Sydecar supports double-layer SPVs (with required documentation) whereas AngelList has ended support for these vehicles (we suspect due to compliance issues that may arise). 

• Superior Customer Service: While it’s not specific to the syndicate product, we’d be remiss if we didn’t mention Sydecar’s customer support as a huge competitive advantage. The platform is fairly self-serve, given the high level of automation, but whenever we do run into an issue, their team always gets back to us within a few hours. Having experienced many different platforms and compared notes with other GPs, this isn’t always the case with other admins.

What We’d Like to See Next: 

• Automation for Edge Case SPVs: Sydecar’s product is focused on standardization and is best-in-class for straightforward SPVs. If you’re running more complicated deals (i.e. double-layered SPVs) or if the deal terms change, you’ll likely need a bit more manual support for their team. As an example, if deal terms change, the GP has to get all LPs to re-opt into terms, whereas some fund admins will handle this for you. We’ve been told that Sydecar is working to expand the variety of deal types they can support through automation, so we anticipate fewer manual processes in the near future.

• Co-Syndication Network: While we appreciate the privacy of Sydecar’s platform, we’d also love to see more tools to collaborate with other GPs would be awesome. Co-syndicating refers to a collaborative investment strategy where two or more syndicates join forces to manage an SPV together. This approach involves pooling capital from the networks of the participating syndicates to invest in a particular deal, allowing small and new syndicates to get the attention of LPs from larger syndicates. There is good and bad to this but generally more good. We built much of our network through co-syndications and, in the process, we’re able to get exposure to a lot of LPs we otherwise would not have known. From what we’ve heard, tools are in the works to facilitate more collaboration while not losing the GP / LP relationship. 

• Adding Crypto Support: Sydecar does have functionality for double-layer SPVs (with required documentation), which other fund admins do not; however, they still lack support for token deals. From what I’m told, they are working on finding the right banking partner for this, so hopefully it’s coming soon. 

• Access to Capital: Because Sydecar is not a marketplace, there is no mechanism for LP discovery built into the platform (in contrast to AngelList, where new LPs might be sent to your syndicate).  While this is beneficial in many ways, it also means that you’re on your own in terms of access to capital. We’ve found that the majority of “discoverable” LPs on other fund admin platforms are not active these days, so we’d love to see Sydecar come out with innovative solutions to help GPs get access to LP capital (similar to the Capital Extension Program they launched with MDSV Capital earlier this year).

In short, Sydecar is a great platform for syndicate leads. For 99% of those running SPVs, they’ll likely have everything you need and even some things that other major platforms do not have (like reasonable fees). They are one of two fund admins we use, like, and recommend. We believe with their new syndicate launch, we’ll be able to run more and more SPVs on the platform.

So, how do they stack up to the competition, and which syndicate platform should you use?

In addition to running deals on Sydecar, we still actively syndicate opportunities on AngelList and know this platform extremely well, having run every type of deal every which way on them. 

AngelList has a great syndicate product with great support, fast turnaround times, and reasonable pricing on large SPVs. Our own concern is that it feels the syndicate/SPV product is secondary for them as they’ve shifted focus towards their traditional fund, rolling fund products, and SaaS add-ons (which I imagine have much more favorable business models and unit economics). Additionally, while the marketplace model has a ton of benefits, it also leaves you (the GP) open to potentially having your LPs solicited to (or at least gives the appearance of that) and restricts how you can communicate to your LPs on their platform. 

Sydecar and AngelList are both great, it really depends on your needs. If you’re running smaller SPVs (between $100k-300k), want complete ownership of your LP relationship, are doing double-layer SPVs, and want to be a part of a company that is extremely customer/GP-focused, Sydecar is a great place to start. If you are prioritizing the most robust product and support set, even if it means potentially higher costs on some SPVs, and/or care more about the marketplace features, then AngelList is a great solution. 

As part of Sydecar’s syndicate launch - they are offering concierge onboarding to all Last Money In readers! Reply to this email if of interest. 

If you enjoyed this article, feel free to check out our prior articles on resources: 

• Last Money In's Venture Capital Resource Starter Guide

• 🚀📈 v2 Playbook to Launching a Syndicate

• David Sachse & Winter Mead: Decoding the Family Office-VC Fund Dynamic

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.

If you enjoyed this post, please share on LinkedIn, X (fka Twitter), Meta and elsewhere. It goes a long way to support us!

We’ll be back in your inbox next Wednesday on our next topic. Thanks for tuning in!

Questions? Comments? Feedback? We welcome all, and would love to hear from you!

Follow the Last Money In authors on LinkedIn

✍️ Written by Zachary and Alex