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The Co-Syndication Network is Dying

Co-syndication networks represented much of the activity of the emerging venture capital special purpose vehicles (SPVs) over the last five years. Co-syndication refers to the process where one syndicate General Partner (GP) shares an investment opportunity with the Limited Partners (LPs) of another Syndicate GP. For example, if Syndicate X is running an SPV to invest in a startup, and a GP from Syndicate Y shares the link to that deal with their own LPs, this is considered co-syndication. 

The benefit for new GPs is that they can build investor networks incrementally over time leveraging the LP communities built by other GPs. For LPs, it can also be great, as they get enhanced deal access by seeing more investment opportunities. 

As a new manager entering the ecosystem in 2020 – I initially had no LP network and relied almost entirely on co-syndication (i.e. the LPs of other larger syndicates) to fill my VC SPVs. The first deal I syndicated we raised $400k for very quickly; at 20% carry, that was around $80k in carry dollars we had in the deal. It was a Series A deal that I co-syndicated with one of the OG syndicates at the time. Fast forward, we now have over 7,500 LPs and the vast majority of them have invested in at least one of our deals. 

I can’t understate the importance of this tactic to help me solve the cold start problem of how to find LPs in a low friction way. And my story isn’t unique – many new syndicators have relied on this co-syndication ecosystem to fill their allocations, build their LP base and community and ultimately build self-sustaining syndicates. Without it, I likely would have never started syndicating or it would have taken me a lot longer at minimum.  

Fast forward to 2025, the VC SPV landscape has shifted dramatically, creating a fundamentally different environment for new entrants trying to close their first SPVs. Most of the GPs who were co-syndicating when I started are mostly gone or have stopped syndicating, and the ones that are left have, for the most part, LPs that are overexposed to venture and thus often unengaged in co-syndication tactics. 

And it’s a meaningful change, in the short term at least, for the SPV ecosystem. It’s disheartening for new GPs to launch an SPV and see it fail. Have it happen a few times on your first deals and you’re probably looking to exit the SPV ecosystem or enter VC in another means (e.g. try to work for a fund). It’s not fun spending an enormous amount of time sourcing what you believe to be a compelling company, telling the founder you can likely commit to the round and then fail again and again to deliver. 

But there is some good here - those GPs that have remained or come on to the scene are typically of much higher caliber and really playing the long game both with venture and their LPs.

The Golden Era of Co-Syndication (2020-2021)

When I began raising SPVs in 2020, the co-syndication model thrived on several key factors. Venture was hot as were IPOs → SaaS, e-comm and other sectors were exploding in value and retail LPs up until this point had very few avenues to get into venture capital and in general we’re likely underexposed or had no exposure to the space.

Fast forward to 2021 → capital abundance during the low interest rate environment created perfect conditions for alternative investments with a macro of risk on everything & the co-syndicate ecosystem operated as a well incentivized community, with established managers helping newcomers and sharing deal flow generously. 

Additionally, for one of the first times ever, the technology infrastructure supporting these networks had matured significantly, reducing friction for both GPs and LPs. Up until this point, there was really no way to access venture capital for retail investors. And to compound things, there was high LP enthusiasm for venture as an asset class, as success stories from earlier vintage funds and deals like Uber inspired new entrants and interest. 

The SPV model itself had proven its value, offering LPs deal-by-deal discretion rather than blind pool commitments, which dramatically lowered the trust threshold required to back new managers. For emerging managers like myself, this broke down the barriers where LPs didn’t need to believe in me, just the deal without the burden of a multi-year track record standing in the way of raising capital. 

The virtuous cycle was clear: quality deals attracted more LPs, which in turn attracted more quality deals and managers and so on…

The Current State: A Softer Ecosystem

Come 2022 and the venture market started to soften significantly as interest rates went up, liquidity dried out, and the regulatory markets (from an FTC, SEC, etc. regime) began to tighten. These events slowly diminished retail, and institutional, appetite in venture capital. Fast forward to 2025, and the co-syndication model that launched countless VC Syndicates is somewhat exhausted. 

LP fatigue, which candidly is a problem in venture overall, has set in dramatically, with investors becoming increasingly selective about where they deploy capital. The initial excitement of venture investing has collided with the reality of illiquidity and long feedback loops, particularly as the exit environment remains challenging. 

I’ve personally witnessed a mass exodus of general partners from traditional co-syndication platforms, leaving these networks behind. Many established managers who once generously shared their deal flow have retreated to their direct LP relationships to optimize filling their own allocations, eliminating a critical entry point for newcomers. 

But it's not all bad. In fact, I'd argue that this evolution is ultimately beneficial for limited partners & the ecosystem as a whole:

• Higher Quality Deal Flow: The increased barriers to entry for filling SPVs have naturally filtered out many opportunistic or tourist GPs, leaving a smaller but more qualified pool of investment managers sharing deals

• Elevated Investment Standards: With co-syndication becoming more selective, the quality bar for deals has risen significantly—fewer subpar opportunities circulate through these networks

• Focused Investment Discipline: The selective environment forces both GPs and LPs to apply stricter investment criteria, leading to more thoughtful capital deployment 

The Path Forward

For those still determined to build new venture SPVs in today's challenging environment, co-syndication remains a viable path if you have exceptional deal flow. However, successful newcomers to the SPV ecosystem have discovered alternative approaches worth considering. What I’ve seen work in the last 12 months to break in. 

1. Truly elite deal flow. Even in this challenging market, premium co-syndication partners actively seek collaborators with exceptional deal access. If you consistently source top 1% opportunities, you'll find many GPs will want to co-syndicate with you.

2. Existing high value communities. A few community leaders in startups/venture who've built authentic, high-trust networks have successfully monetized their audience via the SPV model, leveraging their unique LP base. These pre-existing relationships provide capital and potentially deal flow. 

3. Strategic LP Acquisition. Some emerging syndicators have thrived through disciplined, targeted relationship building with high-value LPs, mostly hitting the road. This hands-on approach—prioritizing in-person connections over digital outreach—creates differentiated investor networks.

4. Scouting. Scouting for larger syndicates is an easy way to monetize your deal flow without dealing with the headache of running SPVs or finding LPs. Many of our best deals have come from scouts, and the burden to execute is completely on us (not the scout), so it’s great for those who want to dip their toes in SPVs without dealing with the operational complexities / LP aspect. 

5. The micro fund first approach. Counter to what’s typical, today's climate may favor starting with a small fund ($5-15M) before expanding to SPVs. This creates a stable capital base, institutional credibility, and flexibility to offer co-investment opportunities—effectively reversing the traditional SPV-to-fund progression.

We’ve also had to adapt our model, doing less SPVs and spending a lot more time on specific bets. The pure play SPV ecosystem requires constant adaptation, and we are no exception. 

If you enjoyed this article, feel free to view our prior posts on adjacent topics 

• Why Syndicate Leads Don’t Survive 

• The Syndicate LP Churn Problem 

• What Really Drives Investment Interest in SPVs

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