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The Emerging VC Toolbox

May 5, 2022

Halle Kaplan-Allen and Winter Mead

This piece was written in collaboration with Winter Mead of Coolwater Capital.

Emerging venture investors are expected to do it all when it comes to building their firm. In addition to the obvious functions of fundraising, deal sourcing, and portfolio support, many new VCs are surprised to find themselves taking on the roles of lawyer, accountant, CFO, marketer, HR, and more.

Say it ain’t so!

At Sydecar, we hope to take some of that burden off of your plate. We’ve turned our years of experience as investors, lawyers, tax professionals, and fund accountants into a product that guides new investors down intentionally built paths, so that you never lack confidence or transparency into the decisions you make.

We built this product because we observed a white space in the market. As emerging fund managers, we sought out a platform that would allow us to highlight our differentiated brand, without compromising on efficiency, credibility, or compliance. And when we couldn’t find one, we built it ourselves. In the process, we consulted with fellow investors and tried out countless tools and services ourselves. So rather than leave you go down that path yourself, we’ve aggregated our findings in the “Emerging VC Toolbox.”

Choosing tools is not a one-size-fits-all exercise. Your investing stack should align with your strategy as an investor, with a few driving considerations:

  • Which tools work best for your specific investment strategy and structure

  • How pricing can change over time from first-time customer to repeat customer

  • How do your founders interact with these tools, and is it a good user experience for them

  • How well do the service providers get along

  • How well do the software tools integrate e.g. accounting + fund admin, or billing + accounting, etc.

As a new investor building a track record with SPVs, your toolbox may look different from someone who is managing a fund. Today, there are more ways than ever before to participate in private investing: angel investing, syndicating deals, crowdfunding, general solicitation, or raising a traditional GP/LP fund.

These investor types have risen on the back of several market trends, including:

  • A new generation of investors who view autonomy and business-building as something more important than a “steady” paycheck

  • Founders who want value-added investors, especially at the earliest stages of company growth

  • Founders wanting emerging managers on their cap tables because they offer empathy and diversity

  • Emerging managers, including solo capitalists, securing competitive allocations versus institutional investors to lead rounds

  • Traditional and new LPs investing in emerging managers and becoming more integrated with the investment process, demanding more transparency, and seeking flexibility in what they invest in across VCs’ portfolios

  • Disintermediation of the traditional “lead VC” — meaning the traditional role of “lead investors” has transformed into an investor managing networks of scouts, deal partners, and value-add LPs

As new participants flood the venture ecosystem, innovation and new infrastructure is required to support new modes of portfolio and brand-building. Emerging VCs need tools that help them understand and leverage their investors, investments, and networks to optimize their investment strategies. If you are a “solo capitalist” who’s just starting to build your track record, here are the tools you should consider as part of your stack:

Education:

Deal Flow:

Research and Diligence

CRM:

Marketing & Brand:

Investor Relations & Portfolio Support:

  • Visible VC for automating portfolio data collection and sharing updates with your LPs

  • Google Alerts to set up alerts to stay on top of news about portfolio companies

  • Pulley for equity management & 409A valuations

Fund Closing & Admin:

Given the myriad number of resources, tools, and services available to emerging venture investors, it’s important to have a strategy for building a toolbox that will deliver the most value to you and your unique strategy. We know that the process requires an up-front investment of time and requires ongoing management — as you embark on that journey, please don’t hesitate to reach out to us for guidance. Adopting the tools, programs, and services that are right for your strategy is a heavy lift to start, and an ongoing management exercise. If we can be helpful in guiding you in the right direction, please don’t hesitate to reach out!

This piece was written in collaboration with Winter Mead of Coolwater Capital.

Emerging venture investors are expected to do it all when it comes to building their firm. In addition to the obvious functions of fundraising, deal sourcing, and portfolio support, many new VCs are surprised to find themselves taking on the roles of lawyer, accountant, CFO, marketer, HR, and more.

Say it ain’t so!

At Sydecar, we hope to take some of that burden off of your plate. We’ve turned our years of experience as investors, lawyers, tax professionals, and fund accountants into a product that guides new investors down intentionally built paths, so that you never lack confidence or transparency into the decisions you make.

We built this product because we observed a white space in the market. As emerging fund managers, we sought out a platform that would allow us to highlight our differentiated brand, without compromising on efficiency, credibility, or compliance. And when we couldn’t find one, we built it ourselves. In the process, we consulted with fellow investors and tried out countless tools and services ourselves. So rather than leave you go down that path yourself, we’ve aggregated our findings in the “Emerging VC Toolbox.”

Choosing tools is not a one-size-fits-all exercise. Your investing stack should align with your strategy as an investor, with a few driving considerations:

  • Which tools work best for your specific investment strategy and structure

  • How pricing can change over time from first-time customer to repeat customer

  • How do your founders interact with these tools, and is it a good user experience for them

  • How well do the service providers get along

  • How well do the software tools integrate e.g. accounting + fund admin, or billing + accounting, etc.

As a new investor building a track record with SPVs, your toolbox may look different from someone who is managing a fund. Today, there are more ways than ever before to participate in private investing: angel investing, syndicating deals, crowdfunding, general solicitation, or raising a traditional GP/LP fund.

These investor types have risen on the back of several market trends, including:

  • A new generation of investors who view autonomy and business-building as something more important than a “steady” paycheck

  • Founders who want value-added investors, especially at the earliest stages of company growth

  • Founders wanting emerging managers on their cap tables because they offer empathy and diversity

  • Emerging managers, including solo capitalists, securing competitive allocations versus institutional investors to lead rounds

  • Traditional and new LPs investing in emerging managers and becoming more integrated with the investment process, demanding more transparency, and seeking flexibility in what they invest in across VCs’ portfolios

  • Disintermediation of the traditional “lead VC” — meaning the traditional role of “lead investors” has transformed into an investor managing networks of scouts, deal partners, and value-add LPs

As new participants flood the venture ecosystem, innovation and new infrastructure is required to support new modes of portfolio and brand-building. Emerging VCs need tools that help them understand and leverage their investors, investments, and networks to optimize their investment strategies. If you are a “solo capitalist” who’s just starting to build your track record, here are the tools you should consider as part of your stack:

Education:

Deal Flow:

Research and Diligence

CRM:

Marketing & Brand:

Investor Relations & Portfolio Support:

  • Visible VC for automating portfolio data collection and sharing updates with your LPs

  • Google Alerts to set up alerts to stay on top of news about portfolio companies

  • Pulley for equity management & 409A valuations

Fund Closing & Admin:

Given the myriad number of resources, tools, and services available to emerging venture investors, it’s important to have a strategy for building a toolbox that will deliver the most value to you and your unique strategy. We know that the process requires an up-front investment of time and requires ongoing management — as you embark on that journey, please don’t hesitate to reach out to us for guidance. Adopting the tools, programs, and services that are right for your strategy is a heavy lift to start, and an ongoing management exercise. If we can be helpful in guiding you in the right direction, please don’t hesitate to reach out!

This piece was written in collaboration with Winter Mead of Coolwater Capital.

Emerging venture investors are expected to do it all when it comes to building their firm. In addition to the obvious functions of fundraising, deal sourcing, and portfolio support, many new VCs are surprised to find themselves taking on the roles of lawyer, accountant, CFO, marketer, HR, and more.

Say it ain’t so!

At Sydecar, we hope to take some of that burden off of your plate. We’ve turned our years of experience as investors, lawyers, tax professionals, and fund accountants into a product that guides new investors down intentionally built paths, so that you never lack confidence or transparency into the decisions you make.

We built this product because we observed a white space in the market. As emerging fund managers, we sought out a platform that would allow us to highlight our differentiated brand, without compromising on efficiency, credibility, or compliance. And when we couldn’t find one, we built it ourselves. In the process, we consulted with fellow investors and tried out countless tools and services ourselves. So rather than leave you go down that path yourself, we’ve aggregated our findings in the “Emerging VC Toolbox.”

Choosing tools is not a one-size-fits-all exercise. Your investing stack should align with your strategy as an investor, with a few driving considerations:

  • Which tools work best for your specific investment strategy and structure

  • How pricing can change over time from first-time customer to repeat customer

  • How do your founders interact with these tools, and is it a good user experience for them

  • How well do the service providers get along

  • How well do the software tools integrate e.g. accounting + fund admin, or billing + accounting, etc.

As a new investor building a track record with SPVs, your toolbox may look different from someone who is managing a fund. Today, there are more ways than ever before to participate in private investing: angel investing, syndicating deals, crowdfunding, general solicitation, or raising a traditional GP/LP fund.

These investor types have risen on the back of several market trends, including:

  • A new generation of investors who view autonomy and business-building as something more important than a “steady” paycheck

  • Founders who want value-added investors, especially at the earliest stages of company growth

  • Founders wanting emerging managers on their cap tables because they offer empathy and diversity

  • Emerging managers, including solo capitalists, securing competitive allocations versus institutional investors to lead rounds

  • Traditional and new LPs investing in emerging managers and becoming more integrated with the investment process, demanding more transparency, and seeking flexibility in what they invest in across VCs’ portfolios

  • Disintermediation of the traditional “lead VC” — meaning the traditional role of “lead investors” has transformed into an investor managing networks of scouts, deal partners, and value-add LPs

As new participants flood the venture ecosystem, innovation and new infrastructure is required to support new modes of portfolio and brand-building. Emerging VCs need tools that help them understand and leverage their investors, investments, and networks to optimize their investment strategies. If you are a “solo capitalist” who’s just starting to build your track record, here are the tools you should consider as part of your stack:

Education:

Deal Flow:

Research and Diligence

CRM:

Marketing & Brand:

Investor Relations & Portfolio Support:

  • Visible VC for automating portfolio data collection and sharing updates with your LPs

  • Google Alerts to set up alerts to stay on top of news about portfolio companies

  • Pulley for equity management & 409A valuations

Fund Closing & Admin:

Given the myriad number of resources, tools, and services available to emerging venture investors, it’s important to have a strategy for building a toolbox that will deliver the most value to you and your unique strategy. We know that the process requires an up-front investment of time and requires ongoing management — as you embark on that journey, please don’t hesitate to reach out to us for guidance. Adopting the tools, programs, and services that are right for your strategy is a heavy lift to start, and an ongoing management exercise. If we can be helpful in guiding you in the right direction, please don’t hesitate to reach out!