How VCs Structure a Syndicate and Recruit Coinvestors

David Teten

First, a formal definition: According to Capital Dynamics , “Co-investments are direct investments in a company made alongside and on the same terms as a lead [General Partner]. GPs strategically invite trusted [Limited Partners and others] to co-invest, often based on the LP’s ability to add value or when the amount of capital required to complete an attractive transaction is larger than they are able to invest alone.”.

Why Investor Titles are Important

This is going to be BIG.

The other day, I generated a lot of buzz and feedback around my assertion that calling yourself an “angel investor” should require a little more than small syndicate investments: You are not an angel investor if all your investments are less than $10k, made through @AngelList syndicates, and the founder doesn't even know who you are because you've never met. Now, everyone’s a partner, blurring the line around who can actually lead an investment and get a deal done.

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What’s the difference between angels and seed VCs?

Hippoland

It would’ve been something like: Angels: Uses his/her own money to do investments Writes small checks Mostly sole decision maker VCs: Uses 3rd party money to do investments (from limited partners) Writes large checks Multiple decision makers and a concrete process But today, some of these things have changed. On the flip side, through the rise of syndicates, angels are now more akin to VCs. Ok, now let’s say we dump Hippo Fund and instead create an AngelList Syndicate.

How We Think About Values Versus Deeply Held Beliefs

Feld Thoughts

” Each of our funds is $225 million, we have four partners and no other investment staff, and we work out of the same office we’ve worked out of since we started in 2007. ”) But at the end of 2013, when the JOBS Act became official and AngelList created Syndicates, we decided to understand the phenomenon better by participating in it. Until we created this fund, we limited the amount that we could invest in a company to $15 million.

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

K9 Ventures II will still be syndicating most investments with other seed and angel investors. This new $40M fund is backed by several high quality institutional limited partners including university endowments, foundations, family offices and fund of funds and key individuals. I’d like to thank each of the new limited partners in K9 Ventures II for their support and for the confidence they have expressed in me and in K9 by making this commitment.

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

K9 Ventures II will still be syndicating most investments with other seed and angel investors. This new $40M fund is backed by several high quality institutional limited partners including university endowments, foundations, family offices and fund of funds and key individuals. I’d like to thank each of the new limited partners in K9 Ventures II for their support and for the confidence they have expressed in me and in K9 by making this commitment.

Angel Investing: Know (What Motivates) Thyself

Agile VC

As a VC investing not only personal capital, but on behalf of limited partners, one can’t take this strategy. My NextView partners & I have a fiduciary responsibility to invest and manage our LPs money… we cannot look them in the face and tell them “We lost a ton of dough on a bunch of companies, but man… we learned a bunch along the way.” I was recently talking with another member of LinkedIn’s founding team.

Final Close: The Story Behind NextView's Own Fundraise ? AGILEVC

Agile VC

My partners and I wanted to peel back the curtain slightly for those of you who’ve been following our progress, and also acknowledge the help and support numerous folks have provided as we got this new VC firm off the ground. We’re thrilled to have among our limited partners a select group of individuals from the startup ecosystem as well as several large institutional investors (including a university endowment, a corporate pension fund, and a multi-family office).

LP 100

An Investor’s Personal Social Media Tech Stack: In the future, everyone will be famous for 15 followers

David Teten

They’re taking a $1m check from me, or giving $5m to me as a limited partner. Other coinvestors: Limited partners, other VCs who are coinvestors, private equity funds which are potential growth-stage investors, etc. The tools I use below are relevant even if you’re in a role where your public communication is very limited, e.g., for regulatory reasons, or if you don’t want to allocate the time to write significant public-facing content.

Flexible VC, a New Model for Companies Targeting Profitability

David Teten

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. Similar to the explosion of seed funds in the past decade, we (and some limited partners too ) believe these Flexible VCs are on the forefront of what will become a major segment of the venture ecosystem.

How to Scale a Venture Capital (or Private Equity) Fund

David Teten

But, we normally have a clear ceiling on how high we can grow AUM, before hitting practical limits to deploying capital within the traditional VC model. . My Partners at HOF Capital are younger than I am, which means that we have a half-century horizon for the franchise we are building. – Build out low-cost force multipliers such as scouts , Advisors, Entrepreneurs in Residence, Venture Partners, and so on. – Hire more non-Partner staff.

Announcing NextView Ventures II

Rob Go

On #2, we have been fortunate to collaborate with a wide group of exceptional entrepreneurs, coinvestors, and limited partners. Thankfully, that POV has been positive, and allowed us to bring on 4 new institutional limited partners in addition to our existing LP’s, several of whom significantly increased their commitment to NextView II. On behalf of our team at NextView, I’m very pleased to announce that we have just closed our second fund.

Our New Fund – Foundry Group Next 2018

Feld Thoughts

The $750 million fund combines all of our prior fund strategies – our early stage, early growth, and partner fund investments – into a single fund. In 2016, when we raised Foundry Group Next, we approximately doubled the size of that fund to $500 million since 30% of it was going to be invested in partner funds and 70% in early growth. When we started Foundry Group, we had four equal partners. We now have seven equal partners.

IRR 21

VCs eating our own dog food: Using technology and analytics to make better investments

David Teten

But in business, you want a lot of partners. In the private equity universe, most Partners have primary training as deal-makers, not as managers. See Bessemer Venture Partners’ A comprehensive guide to security for startups. A more efficient approach to fundraising than haphazard networking is to mine the data exhaust from the limited partner universe to identify those LPs most likely to find your fund attractive, and focus all your energy on them.

How Private Equity and Venture Capital Investors Are Eating Their Own Dogfood

David Teten

PEVCTech is partnering with Blue Future Partners to run the first large-scale survey of VCs’ technology stack. Johann Kratzer of Blue Future Partners , a fund of funds, observed, “The majority of the hundreds of funds we’ve diligenced rely predominantly on their relationships to source deals. Greylock Partners. Relationship Science makes it easier to understand and map social networks into potential limited partners.

Chronic Under-financing of EU Start-ups Driven by Mindset

Babbling VC

Conversely you could blame the LP's (limited partners: the investors in venture funds) and say they are the one's not risking it enough. Further, VC's will have to simply learn to syndicate more and work together. I've read and written about it many times but I think there is one thing which is never loudly spoken about when comparing the EU to Silicon Valley (or the US in general).

Corporate Venture Capital: Obligatory or Oxymoron?

David Teten

She had so much insight to share that we broke the interview into two parts, 1) Corporate Venture Capital and more broadly, 2) How the Fortune 500 Can Buy, Invest and Partner with the Innovation Economy (coming soon). . Access to the corporate investor’s ecosystem can open up great opportunities from technology validation to customer and partner development. Others follow independent financial lead investors and most require that independent investors be part of the syndicate.

The Singularity hits Venture Capital (Wilson/Kauffman Redux)

Fred Destin

Control Capital Intensity : VC's want (or should want) to limit the amount of capital they put at risk before risk is reduced or a company is in scaling mode. Each partner needs to overcome his or her own aversion to loss and have the courage to let go of companies that are not on the right track, support their partners whose startups are taking off, and redirect the precious investment reserves that they had allocated to their own babies in doing so.