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The Zero-to-One Playbook: How to Build a Power Syndicate Now

Running a syndicate is not easy. Starting a syndicate is even harder. Once you have LPs that invest with you and good deal flow the job is way easier than getting your syndicate off the ground. This is kind of similar to a startup trying to get from $10m revenue to $20m. It’s really hard but many would argue it’s far harder to get that first $10m in revenue and there’s a gigantic graveyard of companies that could never get there.

This week's post is going to focus on the 0 to1 stage for an aspiring syndicate lead looking to get their syndicate off the ground. If I were to start a syndicate from scratch today, here is how I would go about it. 

Start with Friends & Family

Now let’s be real. The richer you and your family are, the easier this is. If you are not rich and don’t have rich (and interested) family members, then focus on friends. If you don’t have many accredited investor friends, this is going to be tough… but not impossible. 

When I first began doing SPVs, you may need a base of people that might be interested and have some capital to invest in startups. When you find a deal/founder that you are A+ excited about and have secured some small allocation in the deal, I’d put together a deal memo to highlight your enthusiasm about the opportunity and break down everything from problem to solution to market to founders to traction, etc.

I’d leverage your existing rolodex by sharing the deal opportunity over email and/or phone with your friends/family that you think might be a good fit and could be interested to invest with you in the given deal. Depending on the location of your network, I would definitely recommend setting up a Pitch / Q&A with the founders. Doing this by Zoom is easiest but if you can get a good in-person audience that will be great.

I used to curate these in-person pitches with founders before covid, and in my early days of running SPVs, it worked very well for all. I had the Pair Eyewear founders come and pitch at seed (now series C and massive markup) for like 15 potential investors, some of which came in the SPV we ran. We also did this for Loverboy (pre-launch) at Spring Place to a way larger audience.

Remember, just because folks are accredited or HNWI does not mean they like startups or want to invest in venture. This is something you will need to get a better read on to identify who is interested in early-stage investing versus those that are not.

Full Disclosure: I don’t do this now because it’s not scalable for the number of deals we do, but this stage is really about relationships and trust building above scalability. I think doing things that don’t scale like these will really set you up for longer-term success, and longer-term success is what matters here. 

Example IRL focused Syndicate:

I met Kelley Arena of Golden Hour Ventures & Annie Evans of Dream Ventures and I loved how have focused on operating this syndicate as an in-person community experience. Golden Hour Ventures and Dream Ventures operate with the intention of bringing education and community to angel investing and deal flow. They deploy capital 3-6 times per year with a focus on specific industries & stages. Their network is mostly women, spanning industries and expertise, and add value in having a group of invested ambassadors, who often are the brand's consumer, on the cap table.

IRL Component: What makes their model unique is that they host investor events for our network, often roadshowing in NYC, LA and Miami, where the founder pitches live and fields an Ask Me Anything style of Q&A. Post -deployment, their investor syndicates will meet with the founder 1-2x year, IRL and virtual, to get investor updates, meet the other investors, and brainstorm on ways to amplify the brand. 

**The first deals are typically the hardest to complete because you haven't yet built out your LP network. Sydecar as an SPV admin platform can be extremely helpful in allowing as little as $45k SPV’s without going out of pocket for fees.

Networking

Networking could not be more important when it comes to 1) sourcing and 2) identifying LPs to back your deals. This is a never ending game you need to play and it can pay off in massive ways at any time. It compounds if you do it right. 

Here are the core avenues I would focus on networking:

Founders: you need to figure out how to meet founders where they are and build rapport with the general community (not just founders you invest in). Whether its founder communities, attending demo days, IRL/virtual events, getting intros from other founders/friends, you will need to rapidly grow your founder network to be able to source the few deals that are for you.

Venture Capitalists: this one was core to my getting started story. In the early days, I spent probably equal time networking with VCs to try and pay it forward with deal flow to learn from them and build relationships that would ideally lead to unique deal flow. I highly highly recommend figuring out (likely cold outreach or warm intros) how to meet as many relevant VCs as possible. It is important to approach with more of a give than take mentality here. You cannot expect VC’s to help you out, you have to earn it by paying it forward with deal flow to them. The more you share high quality deals with them, and stay top of mind, the more they will appreciate you and share deals they are actually investing in your way. 

This is core to the strategy with our new investor hire we brought on a few months ago and pretty much a KPI. In summary, I think this helps you build a network that leads to deal flow but also learn from and better understand VCs which is incredibly valuable in the early days.

Syndicate Leads: these are your peers. You should want to know them collaborate and potential work together and co-syndicate deals. I’ll get into more on this for its own section below, but there is a small pool of syndicate leads. Learning from what works and does not work for others will be helpful in crafting your syndicate operation. Again, more on this below.

Limited Partners (LPs): without LPs to invest in your deals, you do not have a syndicate. 

This one is a must to run a syndicate. In getting started, I think you really need to tackle the friends, and friends of friends networking game to get that base of investors who you have pre-existing relationships with to get off the ground. It will be easier to get LPs in deals that you have previous trust with but will really have to hustle to grow that investor base and try to get them to introduce you to potential friends of theirs interested in startup investing. Remember, every deal you secure an allocation in, and market to LPs is an opportunity to meet new LPs. Even if they do not come into the deal that was the topic of introduction, they can be an LP in the next deal you run, and you really want to leverage the current deal you are marketing to meet as many potential LPs as possible. This is not too different from a venture fund building LP relationships for their fund, however marketing your capital allocation skill set versus sharing deal-by-deal is a different offering for LPs. In summary, always be networking (to meet new LPs)!

Co-Syndicating Deals with other Syndicate GPs

Co-syndicating deals is one of the best things you can do as a new syndicate lead to build your brand, partner with other GPs, and get more LP awareness for future deals. There are multiple reasons a new syndicate GP would focus on co-syndicating early on. It offers multiple growth hacks including:

• Access a larger capital pool (via your co-syndicate partner who should ideally be more established than you). By bringing a partner into your deal, when they share details on the SPV you are running, in turn you are accessing their LPs, value add, etc. i.e. a larger pool of capital for the given SPV and those relationships.

• Get exposure to new and potential LPs to back you (it’s similar to getting retweeted so all these new followers can get exposure to you). That same email/post/message referenced above is going to provide exposure to new LPs who you can win for your syndicate. If they like the deal you are running point on, it would be smart of them to get involved in your syndicate to see more deals that resonate with them.

• Grow your LP base faster. Generally, the more you co-syndicate in order to grow your LP-base, the quicker you will be in a position to operate independently. In this scenario, you are leveraging your co-syndicate partner(s) access to LPs and value add, but our point here is that it's a hack to more quickly grow your LP base via exposure from your partner's existing LPs.

• GPs also provide other value add in the process. This can take form in many different ways from: Diligencing a deal - Thinking through positioning of the company - Knowledge of competitive comps in the market - Access to LPs who can add value  - Access to co-investors who might be a great fit - Access to customers for the company - Industry relevant experience/knowledge - And more

See more on our “Guide to Co-Syndicating Venture Capital SPV’s” here.

Play for the Long Game

This is more of a mentality than a specific playbook. I see so many syndicate leads getting into the ecosystem and trying to optimize their carry (over being a good partner/easy to work with). Zach and I always talk about how it feels very short-term minded.

I understand wanting to optimize your carry, as that is really the business we are in. However, in order to scale (for most syndicate leads) it takes building great partnerships and working with others for years. When you do something that feels unfair to a co-syndicate partner or a scout who brought in a great deal or a big LP who will want to do many deals with you, it’s a major turn off and deterrent to future deal activity. 

There are probably 10+ syndicate leads that I’ve partnered with in some way, shape, or form that have done something that made me never want to work with them again or include them in opportunities from my side. My advice is don’t act that way, especially in the early days when you are building a brand and relationships.

Make it easy and motivating for other value-add players in the industry to consistently partner with you or source deals. This will help you scale faster and go farther. Most people get too caught up on a given deal and can’t see past that.

Content-as-a-Tool

I will admit it's easier for me to talk about this 1 year plus after I made the decision to dive into doing more long form content. However, it feels like this is worth it for those who want to leverage content to help build a thought leader brand. While I am not going to recommend topics to put content out on, here is how I would think about leveraging content as a syndicate lead:

• Find a topic within VC/startups you are passionate about and you feel there is some gap in the market or lack of content.

• Create a bank of ideas/topics you can write about that you can consistently add to as ideas arise. For me, this is typically weeky.

• Figure out the cadence you want to write. Again, this can be via a newsletter, Linkedin, X etc. 

• Hot Take: Do not worry about following and engagement, just write something you think is actually helpful or provides useful insights to readers that you are actually well-positioned to talk about. Imo, the numbers are overrated when you are putting content out in a niche space. The value of information being provided to readers is what will drive ROI and build the personal brand that helps you as a syndicate lead.

  • I got caught up in figuring out how to get likes/engagement and playing that dumb game. While I was getting more engagement on the “basic LinkedIn posts”, I did not feel excited about the insights/content I was putting out there. I’m personally much happier talking about a niche topic that is hard to find good information on and getting less engagement than sharing a post on VCs who are actively investing and getting hundreds of likes etc (I got 1k+ likes on a post sharing a number of active SF VC firms lol). Content can scale on the internet even if you are just trying to reach a small audience. 

While syndicates certainly do not need to do this, I would do this if I were to start all over again tomorrow. 

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

• A Guide to Co-Syndicating Venture Capital SPV’s

• 💡5 VC Syndicate Learnings After Closing 500 SPVs

• 5 Syndicate Learnings after Completing 500 SPVs (Part 2)

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