Thread by @kerademars

1/ When I ask seasoned investors the best way to get good at investing, they all say the same thing: start a syndicate.

🧵

2/ The cool thing about syndicates is that you get the same terms as the lead. But there's no pressure to invest unless you want to. For angels, being in a syndicate is a great way to get dealflow. But being in a syndicate and starting a syndicate are totally different things.

3/ I sat down with @b_nicks11 (my colleague) who runs 2 successful angel syndicates: the Uplyft Syndicate and Angel Squad.

Brian's helped 70 startups raise $25m from ~2k investors.

Here are some of his learnings around running a syndicate. (also here: hustlefund.vc/post/tips-on-s…)

4/ The first thing a syndicate needs is investors. Otherwise you won't be able to fill allocation.

@b_nicks11's strategy was to convince his former Lyft colleagues that there was no downside to joining.

First, he made a list of people he knew would be value-add advisors.

5/ He told them:

"It's free to join, and I'll do all the work. I'll source the deals, write the memos. If you like the the startup, you can invest at great terms. If you don't, skip. And if you're curious about what they're doing, maybe you could mentor them and learn more."

6/ Once he lined up his investors, Brian needed dealflow.

He started with friends who were early-stage founders. He asked if they were raising and what the terms were.

Then he asked them:

"Would access to a small army of Lyft talent be helpful for you?”

Everyone said yes.

7/ Getting investors that were great early-stage operators gave @b_nicks11's syndicate an edge.

Founders saw this wasn't "dumb money" and gave up allocation.

This created a flywheel effect: Great investors --> win more deals --> attract more investors --> get more deals.

8/ next step: validating deals.

Syndicates only want to invest in companies that have strong signalling.

But @b_nicks11 doesn't have time to review every deal that comes his way.

This is where having a partner is key.

9/ Brian does a 1st pass on deals that come in. Top contenders go to @annimaniac to review.

This is a win-win-win.

Brian wins: he gets help.

Ann wins: she sees deals for her fund while helping Uplyft.

Investors win: they only see deals that have been fully vetted.

10/ Next step: filling the deals. This is where most of the work is. @b_nicks11 sends ~3 messages for each deal.

Each message is crafted around the startup's strongest selling points.

- why this is the right team
- evidence they can sell their product
- scope of the market

11/ Is it worth it?

Here are 4 reasons starting a syndicate might be worth it:

1. You want to start a fund
2. You want to work for a VC
3. You want to invest in specific verticals
4. You want to invest alongside certain ppl

Deeper explanation here: hustlefund.vc/post/tips-on-s…

12/ BTW, @b_nicks11 gets so many questions about this topic that he put together an FAQ doc. You can read it here:

docs.google.com/document/d/1kp…

13/ this is the kind of topic I write about in #SmallBets, a weekly newsletter for early-stage investors.

You can read the whole piece here: hustlefund.vc/post/tips-on-s…