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The State of SPV Investing: 2025 Outlook

I've spent the last year tripling down on SPVs through three distinct channels: 

1. running Riverside Ventures (65-85 deals/year)

2. publishing weekly SPV content via Last Money In, and 

3. curating top syndicated deals through Deal Sheet. 

This comprehensive involvement has given me unique insights into where the SPV market is heading in 2025.

Q4 2024: Setting the Stage

The final quarter of 2024 marked our strongest capital deployment since 2021, with valuations finally returning to realistic levels after the 2020-2021 bubble. A key development has been our successful implementation of management fees (5-10%) on later-stage secondary deals, complementing our primary focus on carry-based returns. This has really helped support making my syndicate lead role a full-time job versus a side hustle. 

Here's what I've learned about management fees: patience is crucial. I ran deals for five years before introducing any management fees, building trust with LPs across hundreds of deals. This long-term approach has been fundamental to our success. New syndicate leads should take note – this isn't a sprint.

Additionally, building Deal Sheet has allowed us to capture subscription revenue. There is no playbook for this as we ideated this over a year ago as a way to curate the top syndicated deals every single week and offer preferred economics to paid subscribers. Even though this can hurt our carry (which might be a bad decision for us in the long run) it has been a fun product to bring to life for our more active LPs and helps us keep a better pulse on SPV activity beyond our own syndicates.

Building on our comprehensive understanding of the SPV space, let's explore the opportunities and initiatives I've identified for 2025.

The Evolving LP Landscape

Our 5,700+ LP base has revealed clear trends in investor preferences:

Later-Stage Appeal

LPs are increasingly drawn to post-PMF deals for three primary reasons:

1. Lower risk profile with proven business models

2. Shorter path to liquidity (2-5 years vs. 10+ for early-stage)

3. Larger check sizes (2-10x their early-stage investments)

Early-Stage Reality Check

While I personally remain most excited about early-stage 100x opportunities, the landscape has shifted dramatically. Today's early-stage deals face unprecedented scrutiny in the broader syndicate ecosystem, requiring:

• Tier 1 lead investors

• Founders with $100M+ exits

• Compelling traction metrics

• Strong market positioning or building in a hotter market

This heightened bar makes early-stage deals harder to close and get LP buy-in as a syndicate lead, but it's creating a more disciplined market.

The Markup Renaissance (?)

We're experiencing an unprecedented wave of markup activity across all investment stages in our portfolio. While historical comparison data from 2023-2024 isn't readily available, current market indicators and portfolio performance strongly suggest a significant upward valuation trend. Notable recent markups include:

• Consumer social seed deal: 2x markup from tier 1 investor after two years

• Web3 Series A: ~9x term sheet three months post-investment

• Early 2024 unicorn investment: 3x markup in new round

• Series C secondary position: 2-3x markup in Series D

• Pre-seed to Benchmark-led Series A in 18 months

Strategic Focus for 2025

1. Early-Stage Core

We maintain our competitive advantage in the sub-$20M valuation space, employing heightened due diligence to identify companies with genuine 100x potential. While early-stage investments now comprise a smaller portion of our portfolio compared to previous years, they remain crucial for maximizing long-term returns.

2. Premier AI & Pre-IPO Opportunities

We're strategically positioning 6-12 SPVs in elite AI companies and late-stage pre-IPO opportunities. These investments target 2-10x+ returns with accelerated liquidity paths, complementing our early-stage strategy. The demand from our LP base for these opportunities has reached record levels, consistently surpassing allocation availability across both early and growth-stage investments.

3. Co-investor Network Development

We're doubling down on tier 1 VC partnerships, recognizing their crucial role in deal validation to our wider LP base. This is the reality and while it does not mean the deal is good, it is crucial to the validation our of general LP base This requires:

• Active sourcing for larger funds where we can strengthen our relationship via quality deal flow their way

• Consistent value addition to partner funds

• Strategic positioning as a reliable co-investment partner who can move quickly and fit well in round dynamics alongside their lead check

4. Strategic LP Growth

While our LP base grows organically through quality deal flow, we're focusing on attracting and retaining larger check writers who:

• Deploy capital thoughtfully

• Bring unique industry expertise

• Can support portfolio companies

• Move the needle in our $1M+ SPV allocations

5. Market Education Initiative

SPVs remain poorly understood across the ecosystem. Through our newsletter Last Money In, we're committed to:

• Demystifying syndicate lead operations

• Sharing best practices and insights

• Building a more transparent SPV community

• Educating new LPs on investment mechanics

6. Scout Network Expansion

Scouts are integral to our syndicate model, offering:

• Unique deal flow access that we would not be able to access without them

• Carry-sharing opportunities → economic upside to capitalize on their deal flow (without having to run a syndicate or figure out how to write a personal $100k+ check)

• We're strengthening our market reach by onboarding several elite scouts with proven track records. Our focus is on quality over quantity - building deep partnerships with well-connected individuals who consistently access premium deal flow and maintain sterling reputations in the venture ecosystem. This targeted approach prioritizes meaningful relationships over an extensive but diluted network.

The Generalist Advantage (for Syndicates)

Scaling beyond 50 deals annually requires a thoughtful generalist approach. Our diverse LP base demands variety – from pre-seed to pre-IPO, consumer to enterprise. While specialization works for some syndicate leads (and is a great strategy for many), our experience shows that a disciplined generalist strategy best serves a large, active syndicate.

This doesn't mean compromising on quality. Instead, it means developing expertise across multiple stages and sectors while maintaining strict investment criteria. Each deal must stand on its own merits, regardless of stage or sector.

Looking Ahead

The SPV market is maturing rapidly, with clearer patterns emerging around deal structures, LP preferences, and successful syndicate models. For 2025, our success will depend on:

• Maintaining discipline in a normalized market

• Building stronger institutional VC relationships

• Focusing on quality deal flow across stages → this is the lifeblood of a syndicate

• Developing a sustainable economic model → carry, management fees, subscription revenue

• Contributing to market education and transparency → selfishly I want to continue to be a SPV thought leader while unselfishly I think it is great for all to better understand the ins and outs of everything related to SPVs… even when we share related “secrets”.

The syndicate leads who thrive will be those who can balance these elements while staying true to their investment thesis and LP relationships. The opportunity has never been bigger, but neither has the responsibility to execute thoughtfully and professionally.

2025, here we come :) 

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

• 👀Why Revenue ≠ Revenue! How to See Past the Blanket Revenue Multiples Put on Companies

• 📈 5 Traits of a 15x+ Revenue Multiple Business

• Breaking Down the Secondary Transaction in Venture Capital

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