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VC Syndicates vs. Funds: Alex Pattis Explains SPVs

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From Sales to Syndicate: Alex Pattis' Journey to Strategic Fundraising

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In this episode, I chat with Alex Pattis, general partner at Riverside Ventures and author of the VC ecosystem newsletter "Last Money In". Alex shares his journey from sales director to launching a syndicate that has completed over 300 deals and deployed $75 million in capital. Alex provides valuable insights into how syndicates operate, their advantages for both founders and investors, and the common pitfalls to avoid. He also discusses the current trends in the syndicate market and offers advice for founders considering working with syndicates.

Here's what you're in for:

  • 04:53 - Demystifying syndicates: Understanding LPs and SPVs
  • 07:54 - The value of syndicates for founders
  • 14:11 - The importance of transparency in the syndicate process
  • 18:37 - Current trends in the syndicate market
  • 32:36 - Common mistakes in the syndicate market
  • 38:01 - Strategic fundraising with Special Purpose Vehicles (SPVs)

ABOUT ALEX PATTIS

Alex Pattis is a seasoned entrepreneur and investor with a diverse background in both operations and venture capital. He is currently a co-founder of Last Money In Media, producing one of the most actionable VC newsletters; focused on explaining Special Purpose Vehicles (SPVs) within the VC ecosystem. He is also a General Partner at Riverside Ventures, an early-stage venture capital firm investing in high-growth technology companies. To date, they have deployed over $70 million. 

Alex's operating background includes nearly a decade of scaling early-stage startups, focusing on growth and commercial strategy. Alex has invested in over 250 companies as a GP at Riverside Ventures. He is passionate about supporting entrepreneurs in the early stages of their businesses. His experience spans both operational and investment roles, giving him a unique perspective on the startup ecosystem.

Connect with Alex Pattis on:

Linkedin: https://www.linkedin.com/in/alex-patt...

Newsletter: https://lastmoneyin.co/ 

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VC Syndicates vs. Funds: Alex Pattis Explains SPVs

Published: Series: Thunder Podcast • Guest: Alex PattisHost: Jason Kirby

Watch the episode on YouTube:

Summary

Riverside Ventures GP Alex Pattis, author of the Last Money In newsletter, breaks down how syndicates and SPVs differ from traditional venture funds, including deal flow dynamics, LP behavior, fee structures, allocation management, and founder best practices for engaging with syndicates.

  • Key topics: SPVs, carry & fees, cap table simplicity, allocations (over/under-subscription), tier-one signaling, LP portfolio construction, growth vs. early-stage, founder-led SPVs.
  • Definitions:
    • SPV (Special Purpose Vehicle): Single-deal legal entity (often an LLC) that aggregates investors into one cap-table line item.
    • Syndicate: Deal-by-deal investing where LPs opt in per deal (no blind pool), typically after a lead sets terms.
    • LP (Limited Partner): Accredited investor backing deals or funds; in syndicates, participates per-SPV.
  • Guest stats: 300+ SPVs; ~$70–75M deployed; thousands of LPs.
  • Best for founders: Engage syndicates once a lead & terms are set; request clarity on process, fees, expected allocation range, and LP value-add.
  • Risks & pitfalls: Misaligned expectations, lack of transparency, overselling, LP etiquette (e.g., public claims before close).

Key Takeaways

  1. Syndicates are “backwards” vs. funds: manager secures allocation first, then invites LPs to opt in.
  2. Cap table stays clean: the SPV appears as one line item, even if many small checks participate.
  3. Fees: ~20% carry is common; setup costs are typically prorated; some SPVs/funds charge management fees.
  4. Signaling matters: co-investors and the lead often drive LP demand.
  5. Founder tips: confirm timing, allocation range, fee treatment, and who the syndicate’s LPs are.

FAQ

How is a VC syndicate different from a fund?

Funds raise capital up front and deploy across a portfolio. Syndicates operate deal-by-deal: the manager secures an allocation and LPs choose whether to participate in that single SPV.

What is an SPV and how does it affect the cap table?

An SPV (often an LLC) is created solely to invest in a single company. It aggregates many LPs into one entity, which shows up as a single line on the company’s cap table.

What fees should LPs expect in a syndicate SPV?

20% carry is common; some SPVs/funds add management fees. One-time SPV setup costs are prorated across participating LPs. Founders typically see the SPV’s net investment after fees.

When should founders engage a syndicate?

Ideally after a lead investor sets terms. At that point, syndicates can move faster to round out allocations and bring value-add LPs.

What etiquette should LPs follow when joining SPVs?

Avoid public claims (e.g., LinkedIn updates) before close, don’t misrepresent sourcing, and respect deal confidentiality.

Full Transcript

Jason Kirby: Welcome back to the show everyone. Today we have Alex Pattis with us, general partner of Riverside Ventures and the author behind Last Money In, the world's number one VC syndicate newsletter. Welcome to the show Alex.

Alex Pattis: Hey Jason, awesome to be here. Definitely excited to chat and share more details here.

Jason Kirby: Yeah, no, I'm excited to have you on the show. You and I have had a relationship for several months now, and I've really enjoyed listening to you, reading your content and learning from your syndicate knowledge of, I think, what you've done over 300 plus deals. I would love for you to kind of tell the audience a little bit about your story and how you went from a sales director to launching a syndicate that has done hundreds of deals.

Alex Pattis: Yeah, so my story really starts with being an early stage operator within a startup. So I moved to New York. I had joined a healthcare tech startup. I was the first sales hire, employee number 11, had a three year run there, some great learnings, ended up joining another company called Market Access Transformation. Joined that company as the first employee pre-launch.

Really good business, bootstrapped for about five years, did a private equity transaction and then ended up selling north of 200 million. So great outcome there. And across that like eight year time span, I got great startup experience. However, you know, while I was at the second company, Market Access Transformation, you know, I kind of felt like my net worth was really all tied into one single outcome, right? And living in New York,

was starting to meet founders and see people kind of building interesting businesses. And a lot of it was just curiosity and a little bit of looking to diversify net worth. And I got into angel investing. So started doing that for about a year, really small personal checks, just getting my feet wet. And through that year and that experience,

I just love spending time with founders, learning about what they're building, figuring out if I could be helpful from like a go to market sales strategy, intros to investors, intros to customers, whatever it could be. And really wanted to do a lot more of this, but also had, you know, limited personal capital to do so. So from there, I actually joined Jason Calacanis' Syndicate, which was my intro to syndicates where I was an LP.

And essentially was able to review different deals that Jason was syndicating, which we'll get into more details there. But it was a nice way to ramp up deal flow, see deals on a deal by deal basis and commit when I wanted to. And very small minimums. I think it's like a thousand dollar minimum or maybe 2000 into these deals. And I guess after a certain amount of time of being an LP in the syndicate, I just was like, Hey,

this would be great to run if I'm running the syndicate. So started that journey. And yeah, there was kind of like a one to two year ramp up of just navigating, right? Like growing an LP base so you've got enough folks that you can actually put together a syndicate. Of course, getting into the right deals, being able to access some of the highest quality founders at early stages, typically pre-seed and seed.

And just navigating everything from setting up a special purpose vehicle and operating a syndicate there. And I think, yeah, while it was definitely a ramp up, it didn't happen overnight. I don't have the story of a bunch of this first deal and it went amazing and all these people invested. I did at least stick with it. And yeah, luckily over the past now three, four years, we've been in a healthy position. Yeah. As a GP at Riverside Ventures, we've now done 300 plus,

SPVs deployed 70, 75 million in total capital. So I've been able to back a lot of awesome founders and have thousands of LPs that have now participated in deals with.

Jason Kirby: No, that's some phenomenal stats and to kind of help it sink in with our audience a little bit more and kind of understand what you've accomplished. Cause this is definitely the anomaly. Like this is very hard to do what you've done, but I think we need to kind of educate our audience a little bit on some key terms here in terms of explaining what is a syndicate. How does it differ from a venture fund and kind of define what an LP is and SPV and things of that sort. Just give them maybe a little bit of an education to our audience.

Alex Pattis: Yeah, so I guess to break this down, like I've used syndicates as a backwards approach to a traditional fund, right? In a traditional fund, you go out, you raise your fund, however many millions you raise, and then over a couple of year timeframe, you're typically going to deploy that capital into your 20, 30, 40 companies. With a syndicate, it's backwards in the sense that I identify a specific deal that we're looking to invest in.

And then once I get an allocation in that particular deal, I will then go to my LPs who have the opportunity to review the deals that I do on a deal by deal basis and commit. So the LPs of a syndicate, right, they're not investing like a traditional fund. They get the opportunity to kind of window shop, see these deals and decide where they're going to allocate or not from there. So it's, you know, it's a different

relationship and it's a different LP base, right? So for a syndicate, like when I say LP, I'm pretty much talking about all our accredited investors, but it spans in so many different directions of LPs, right? Some could be engineers or SaaS salespeople or part of a, you know, ops product role at a growth stage startup or, you know, a Google, a Meta, you know, big companies as well.

We've got a lot of folks that are founders or CEOs, both, you know, high growth startups, big companies, bootstrapped small businesses across the globe. We've got small family offices, folks that have made money in real estate. So it really varies, right? Our LPs are kind of all over the map in terms of their role. But the beauty for them is the deal by deal looks; however,

it's going to be super important for them to think through just building out a portfolio, right? Because when you invest as an LP in a traditional fund, the fund is diversifying your capital as an LP in the fund into a portfolio of companies. In a syndicate, you get to call the shots, but I think we see a lot of people that maybe do, you know, two deals or five deals over a couple of years and...

That's just not going to be a large enough portfolio to really optimize for those 100X type winners. But you get the benefit of the kind of deal by deal looks there. So let me stop there, see if that's kind of a helpful kind of overview of how a syndicate works.

Jason Kirby: No, it is. And I think for founders and LPs that are looking at this, it's an inside look at actually getting to review the deal flow. As an LP investor into syndicates, you get to choose and cherry pick what's of interest to you to write your checks, as opposed to picking just the manager to then make all the decisions.

Alex Pattis: Right. And maybe just one thing I didn't mention is the way a special purpose vehicle works is, you know, it is a legal entity that's set up for the sole purpose of investing in one company and going on the cap table. So, you know, if we do a hundred K investment and you invest 10 K of that hundred K SPV, you are going to technically own about 10% of that legal entity that's set up. So I just wanted to highlight that structure as well.

Jason Kirby: Yeah, there's also a typical fee structure in setting up an SPV. Can you kind of break out how the fees work for the investor and also how it impacts the founders?

Alex Pattis: Yeah. Yeah, so for the investors of a syndicate, I'd say that the standard or like the norm for syndicates is to do 20% carry. There's a little—like it can deviate a little bit if certain people do 10 or 15% carry or at a certain hurdle, they're doing 25–30%, but I would say the standard is 20% carry. Most of the syndicates, like your typical syndicate that operates on AngelList is not

doing any management fees. However, there are plenty of folks that do management fees and it could be a syndicate, it could be a traditional fund that's running a special purpose vehicle kind of outside of their fund. Sometimes you'll see 2% fees across 10 years. Sometimes you'll see one-time 2% fee. And then you're always or almost always going to have SPV setup costs. So those can range from three and a half K to maybe

10, 15K on the very high end. That is a one-time fee for the SPV to be set up and that gets prorated across the LPs who participate in a given syndicate there.

Jason Kirby: And correct me if I'm wrong at any of these points, but effectively the SPV is just an LLC that gets set up and it's a one line entry on your cap table as a founder.

So maybe there's 50 people in an SPV—10, 20, 30, 50—however, it could be a bunch of $1,000 checks. But that doesn't matter to you as a founder, because it all comes onto your cap table as just one entity with one kind of person making the voting decision or one person to kind of get the votes from as opposed to having to go and chase a bunch of small check writers. So it creates a much more simplified cap table. And SPVs can be used for a lot of other purposes, which we don't have to go into on this call. But...

Alex Pattis: Yeah.

Jason Kirby: From your model, it's syndicating out to your existing LP network that has a particular appetite for the deals that you bring to the table and kind of circulating all that. But if you can kind of walk us through, how do you engage with the founder when it comes to running the SPV, getting allocation and communicating whether you oversubscribe or undersubscribe to whatever amount you commit to?

Alex Pattis: Yeah, good question. It's definitely an art there because the reality is, right, I'm working to meet the best founders, stay in touch with them, get allocations once there is a lead in place and terms have been set, right? We're really never leading the round and setting terms. So you have to kind of secure your allocation at the right time. And the reality is I never know exactly where it's going to land, right? Like I have a—I can guess based on the dynamics of

the round, the co-investors, the founder background, the growth, the interest and relatability to my LPs, I can take a guess, but the reality is I never really know. So I think what's super important is when you're securing this allocation with the founder, it's just important to highlight we are a syndicate, we set up a special purpose vehicle, and this is how it works, right? And the way it works is, you know, I would say, hey, Jason, I'm interested to participate in your seed round, your Series A.

I would love to get 200K allocation because I think that's where it's going to land. It could be a little bit less. It could be a little bit more. What I can do is get moving on my end and kind of keep you afloat in real time as to kind of where the allocation is going to land. And what I would do on my end is pretty much just set up the deal memo, kind of an overview of why we're excited about the opportunity, the founder. And typically we share a deck. Sometimes founders want to

review materials, make sure they sign off on it. Sometimes they don't really care. So we work with them in that regard. And then we share this with our LPs to pretty much get them to express their interest. And if they are interested, commit to the deal. And it's typically—I mean, I'd say it's like a 10 day process. We can do it a lot quicker, right? We've had allocations fill in one, two days. There are some that are a grind and it takes longer, but I'd say 10 days is kind of the typical turnaround.

And what I'll do with the founders is kind of just check in with them, right? Maybe a couple of days after we've launched, highlight that, hey, we've got 100K of the 200K committed. I feel really good that, you know, in the next couple of days we'll be able to land at that 200. Or, hey, it turns out there's not as much interest as I thought. You know, it looks like we're going to land closer to 100K and not the 200K. Ideally, I would have set them up to understand that. So I don't, you know,

leave them hanging and they need to find 100K elsewhere. And then there's the other side where it's, hey, this filled up super quickly, a lot of demand for the round, is it possible to get 300, 400K allocation? And if we can, that's great, right? We don't want to leave our LPs' money on the table. We don't want to have to scale back LPs. But I think we also—we know our place, we have to be flexible with the founder and work with them to identify what

allocation makes sense or does not make sense for their given round.

Jason Kirby: And why do you think founders work with syndicates instead of, you know, funds to fill their hole around? Like what's kind of the advantage that founders should be aware of working with a syndicate?

Alex Pattis: Yeah, a couple of things. I mean, first, I do think the manager is one of the most important things, right? So me as the manager of Riverside Ventures, I think those founders have to be excited to have me on their cap table—whether that's operational experience, making intros, or really not doing that much. But when they've got a request, you know, once a quarter on an investor update, jumping in and being helpful there.

So I think that's a large part of getting allocations and knowing everybody else kind of funnels through me. So while, to your point, there might be 20, 50, 100 LPs in an SPV, they really only interact with me. But I also think—and know—we've got a bunch of LPs that have all sorts of great operational experience, starting companies, founding companies, leading teams, and a bunch of different

connections that can be valuable when it comes to looking for customers and getting an intro or looking for talent and trying to find a director of engineering or a head of sales. So I think a lot of syndicates is the manager, who's the person the founder is working with, but also being able to leverage the LPs in the syndicate and the value and the connections that they can bring to the table as well without having that same seat at the table

as a board member and maybe this institutional lead. I don't want to say they take up a bunch of your time. They do, but that's part of the role and what they get raised capital for. Whereas I think we're a lot more kind of laid back when it comes to requests and updates. Of course, we want to be kept in the loop, but we play our role and I think our role is different from a lead and a board member.

Jason Kirby: Yeah, and I think you describe it well. And I think a lot of syndicates are in kind of your world of, you know, there's some value add and it's now kind of getting access to a larger LP base once it's distributed and kind of maybe those LPs want to add value in some way. Maybe they only write a thousand, $2,000 check, but

they know the people you need to get connected to. There's additional value that can come with kind of casting a bigger net, but not paying the price as a founder having the 50 names on your cap table. So it's a great way to kind of get access to a broader base of investors. I guess from my experience working with syndicates and just knowing how the ecosystem works, what would you say are some of the

pitfalls or the kind of misunderstandings that founders have towards working with a syndicate where kind of expectations don't align.

Alex Pattis: Yeah, I mean, I think first and foremost, it's just understanding how they operate. Like I kind of talked about this and, right, I can express a ton of enthusiasm and investing in your company and excitement, but the capital is not ready to go. I have to go back and I have to find the capital. And sometimes it works amazingly well. And sometimes we fall on our face. So I think that's an important thing for founders to understand. While they could commit to the round,

that's one thing. Having the capital ready to go is another thing. Also, I'm generalizing a bit here, but again, syndicates are not leading the round or setting terms, right? So if you're going out for a seed round, and you want to pitch me and I'm excited about it, that's great. I'm not going to be the first VC who jumps in and prices it and kind of gets everything to fall into place. That's not me. I can certainly be helpful in making those introductions,

but there's very little I'm going to do and I can do in terms of committing and investing until that lead is in place. So to that point, I think syndicates fit better, generally speaking, once you've got a lead, you've got the terms that are set and you're looking to fill in capital with value-add folks—folks who can move quickly, folks that you've known and have been around for a while and want to get on the cap table. But if you're reaching out to me because you know I invest in

B2B SaaS companies at seed, I'm not going to be the right fit if you don't have a lead in place yet. As my partner and I say, we do a lot of kind of hanging around the hoop, but I don't shy away from that role.

Jason Kirby: Yeah. And that's kind of why I asked the question—to educate founders in the fact that, if they don't understand how syndicates work, they can come to you and be super excited about, like, we talked to Riverside Ventures. They're amazing. They love us. But you have a certain process, as many do, where you're not going to write a check until certain boxes are checked.

Alex Pattis: Exactly. And I guess to explain that—because I think it's important to founders—is the relationship of a syndicate is different than a fund. The capital's not already there. We need to find the capital. And in order to find the capital, there are certain things that our LPs look for when we syndicate deals. Founders, their background—that's always going to be important. Why are we betting on the right horse for whatever the business could be?

I would say it's quite similar to other VCs and how they think about market sizing and traction. But another thing that's a little bit superficial, but very real to syndicates, is who's leading the round? Who are the co-investors? A lot of people in my syndicate enjoy being part of my syndicate—they think I pick good deals—but they're going to be more excited to see a tier-one VC leading the round than

“Alex is excited because XYZ.” So it is a bit superficial, but I think that's super important. If I talk to a founder who's raising a seed round and we want to commit, having a tier-one VC and getting that buy-in from our LP base is going to be 2–4× versus the same deal, the same founder, the same company, but without that tier-one VC. I don't know—people shy away from talking about it. I don't feel the need to, but I think that's a key driver for a founder working with a syndicate and understanding LP buy-in.

Jason Kirby: Well, Alex, the show is all about demystifying the fundraising experience. That's what we're doing here—demystifying how it really works. And that's why I wanted you on the show: there’s a lot of misunderstanding or mismatched expectations from founders about what to expect. When it comes to small check writer LPs, they're having to rely—one, they use syndicates to get access because they wouldn't be able to get access to deals otherwise.

We don't have enough checks. So the LP incentive is really join a couple of syndicates; no commitment required to join outside of maybe you eventually want to write a check. So it's optionality to see what's coming across the table.

But then, when you actually write that check, they're not doing—they don't have access to the founder. They have no diligence abilities. They can't do diligence on the deal. They're not getting the data room. Unfortunately, it is a vanity game in terms of like, “a16z is investing—well, that must be great.” We can talk about their track record and things, but having a tier-one VC just makes people feel like someone else did the diligence; someone else had the

access and approved, so I feel more comfortable jumping in on this than otherwise—either a known ABC or no other co-investors—because that's the riskiest of it all: when you invest alone. A lot of investors, that's just a hard pass in a lot of cases if no one else is at the table. It sucks for founders because they want that one person to be the person—no one wants to be that person.

Alex Pattis: Yeah, totally. Yeah, I think that was a great summary. I'm not going to say it's impossible for a syndicate to do a deal without a co-investor; that just deviates from the norm and how syndicates work.

Jason Kirby: So let's switch gears a little bit. You have a great newsletter in terms of educating people on syndicates and just how they work. And you obviously have done countless yourself. What are you seeing in the market for syndicates? Are you seeing more and more of these pop up? Are you seeing people do these in lieu of actually starting funds? Can you give us your sentiment on the syndicate ecosystem?

Alex Pattis: Yeah, I've got multiple thoughts there. I think many folks who are successful in running a syndicate are there to build a portfolio and go on to raise a fund or join a fund. It's kind of a middle ground to get your feet wet without jumping into a 10-year commitment—start and run a syndicate and prove you've got deal flow and LP interest. So a lot of folks who start syndicates ultimately aim to raise a fund. I've enjoyed doubling down in the syndicate ecosystem, but a lot of folks do that.

I talk about syndicates all the time and everybody says, “This sounds awesome—I've got good deal flow; I have a bunch of people who invest in deals with me.” It's harder than it sounds. Actually having people commit capital, having multiple people commit into a deal, getting that done and being able to repeat month over month—it’s not easy. It requires a lot of work, nurturing your LP base, and building trust. Like raising a fund, it takes many meetings, work, and storytelling to raise capital and hit go.

In terms of deals in the ecosystem: people are a lot more focused on the economics of a business—not just how big it can be, but how much capital is needed to get there. I also see a lot of individuals interested in later-stage, growth, pre-IPO stuff—shorter path to liquidity, smaller lockups than pre-seed/seed where we're talking about a decade or more. We're seeing more dollars go to these sexier growth-stage, post–product-market-fit deals.

That's unique to the LPs that invest with us, where checks can be 5K, 10K, 50K, 200K. Access to write those size checks in $500M–$10B companies still pre-IPO is appealing, and syndicates are often the only way to invest in many of these because you can't go direct. However, the top early-stage deals are still getting done. This isn't 2021 anymore, but people are certainly deploying capital—just more cautiously. Those are some of the things top of mind in the ecosystem right now.

Jason Kirby: To give people an idea, you definitely have one of the larger syndicates out there in terms of LP base. When it comes to getting deals done, I know you probably only can speak for yourself, but if you can maybe speak to the broader syndicate market—what percentage of LPs actually are doing deals in terms of a deal-by-deal out of the whole LP base that you have,

versus maybe how many LPs are actually active in a year and have done at least one deal?

Alex Pattis: It's a great question. In my syndicate, about 60% has done at least one deal. It varies a bit—folks who’ve become more inactive and have not done a deal in the past year: I segment who I send deals to. It’s not like you're in or out and you see everything. Within the syndicate, priority goes to those who are more active and have deployed more capital over time with me. There are different ways I break down who sees which deals. Some deals are not sensitive; some are hypersensitive, so we work with that.

There's a lot of churn in this space. Some LPs come in, back a few syndicates, and realize they're seeing more exciting deals than expected—so they deploy more than planned and then step back. That's unfortunate: they were only around one to two years and didn't think about building a portfolio over a five-plus-year period. We also have savvy, longer-term investors. I've got a large syndicate, so LP buy-in per deal is fairly small—but that's not a bad thing. As an LP, you shouldn't be doing every deal I

put out. That's your opportunity to double-click and figure out which deals resonate, fit your preferred stage, and match how many portfolio companies you want to add per year and how much you want to deploy.

Jason Kirby: And at the end of the day, in most cases, a lot of LPs are part of multiple syndicates and they're seeing multiple deals in multiple areas. It's hard to estimate exactly who's doing what, but it's interesting for founders to understand how you think about distribution of a deal—how there is control for the GP to decide who gets what deal, maybe not doing a spray-and-pray. Many feel syndicates are just a spray-and-pray to a giant list.

Maybe some people bite. But you've been doing this for a while. You have pretty solid experience and you kind of know who to bring what deal to to deliver on the promise you made to the founder and to secure allocation. From a perspective of a founder going to market—maybe they got a lead, they have momentum in their raise—what would be some of your advice to a founder that has had a conversation with a syndicate or is looking to pursue syndicates as an option to fill their round?

Alex Pattis: I think the timing you laid out is correct—that is the ideal time. It's more actionable when you've got a lead and terms in place and you're looking to round out with syndicates. It's important to understand who the manager of the syndicate is—do you want to work with them? You're still bringing people onto your cap table; it's a long-term relationship. It's also important to understand

how they interact with founders. There's no single right way for syndicates to act post-investment, but founders should understand: are they hands-off and easy to work with, or do they get involved and help with X/Y/Z? Also, who are the LPs in your syndicate? What's the typical check size? How do LPs add value if that's something the founder is looking for? Fit varies by situation, but founders should get details from the syndicate lead and understand the LP base.

Jason Kirby: That's common advice I give to a lot of founders: always ask questions. Many pitch their hearts out and think they did a great job, but they have no idea what that investor can write a check for, how it's going to work, how long it takes, etc.

Another thing to tap into is the reality of check sizes. In most cases, it's a 100K syndication. Sometimes there are fees, as we talked about—setup costs around eight grand. That means the founder usually only ends up with maybe 92K–94K.

Alex Pattis: Yeah. Yeah.

Jason Kirby: So that's something to keep in consideration. You were told 100, but you're actually only getting like 92 or 94.

Alex Pattis: I think that's important for the syndicate to explain. If I'm looking to invest in your company and I want to write 100K, I know I need to raise about 110K so that I can invest 100K. I take that burden on me. I’m not looking to—well, I can explain to the founder, “Thus far we've raised 100K.” That doesn't mean I can invest 100K; that means we've raised 100K and can invest ~91–92K after fees. When I request an allocation, I'm baking in the fees as well. It's important for founders to understand if we've raised X, it means ~0.92× of investable capital.

Jason Kirby: That's also an indicator of what your relationship might be with a syndicate lead—if they're not providing this level of education and managing expectations, that could be a red flag. What are some common mistakes you see syndicates make in the market right now when it comes to getting deals done?

Alex Pattis: I'd say one, lack of transparency on process with founders. We've spoken about this—it's a terrible look to pretend you're not a syndicate and act like a fund, commit, then explain later you don't have capital. It's hard to know allocations you're going to get, so being transparent and asking for ballparks is important. Ultimately it's the founder's decision; you work with them to figure out what works and where there is flexibility.

Many folks request more allocation and come back later to invest less. That leaves a bad taste—maybe the founder didn't understand and would have planned differently had they asked questions. If I say I'm going to invest 200K and I end up investing 100K, that's 100K they need to find elsewhere. Some leads also go into hyper sell mode—overselling a deal, making it seem better than it is, cherry-picking details. That will haunt them. Generally, it's not a great look to go into crazy sell mode for any startup; you never know what's going to happen. Nothing is a sure thing.

Jason Kirby: It's also obvious to seasoned investors when a deal is oversold with excessive adjectives like “amazing” or “best in the world.” On my side as a registered rep, I can’t use those words. Seasoned investors see that as a red flag. If I see that in a syndicate distribution or from a founder telling me how amazing they are,

it's often a red flag—they're puffing their chest instead of letting results speak. Really good advice across the board. What's a fun story? A deal that blew up or came about in an interesting way?

Alex Pattis: 300+ deals—lots of stories packed in there. A good one: invested in a company around 2020 or 2021 at a ~$40M valuation. The company’s been growing profitably with very little dilution and institutional capital. We've done a couple SPVs. Uniquely, they recently bought back shares from investors. We sold ~30–35% of our first SPV, returned a 3× to investors, and still have ~70% of our capital in the deal—cheerleading the future but nice to have non-IPO/M&A liquidity.

A funny/chaotic one: I launched a deal to LPs and within the first hour a handful committed. One LP committed 10K and immediately went to LinkedIn and updated his profile to “Investor in [Company].” The founder was (rightly) upset and reached out to me. I didn’t even know what to say—this isn’t something I typically need to coach people not to do. Most LPs would never do that, but LPs need to be sensitive to certain materials.

Another: we’ve had founders say, “I have friends, family, customers who want to invest. I don't want to take them direct—can I send them to your SPV?” We love that. If we can be helpful and you want those folks on your cap table, we can be flexible with economics. We're seeing more of those—a win-win for the syndicate and founder.

Jason Kirby: I want to call out why that LP updating LinkedIn was an issue. The founder was upset: technically that investor wasn't their deal—they didn't originate it or have the relationship. It's presumptuous to say you're part of the team as an investor. If you're not direct on the cap table, this is advice to our listeners: you're not technically an investor. You can't declare you sourced the deal or you're on the cap table. Some aspiring investors use it to pad a resume to get into venture. Unless you sourced the deal and manage the relationship,

you shouldn't put it on your resume or header. I'm glad we called that out—it's something many need to hear.

Alex Pattis: Absolutely. Hopefully that was a one-and-done situation I never deal with again.

Jason Kirby: I've done a couple syndicate deals myself—some are cool and I'm like, man, I'd love to say that I invested, but it would be inappropriate to say I'm an investor in that company. I backed a syndicate; I tagged along. Credit needs to go where it's owed.

Alex Pattis: Yeah, you see a lot of that out there.

Jason Kirby: Going back—you mentioned founders bringing their own investors into a syndicate, allowing the syndicate to run your friends-and-family round.

Which brings me to SPVs. The SPV—the LLC spun up to consolidate investors into one line item—is strategic for future raises, exits, and approvals. It's a great way to either do what they did with you—“I don't have to do any work as a founder; just go to the SPV lead and they’ll handle it”—or run your own. There are REVs on AngelList, or platforms like Sidecar, where a founder can run an SPV with no carry/fee upside—just setup cost—and indicate that out to your own audience. It's crowdfunding-esque but not on a crowdfunding platform.

You’ve got to keep it to accredited investors with limitations—but it's an option more founders are exploring. That's something we definitely want to share with our audience today. Well, Alex, I've really enjoyed the conversation and the knowledge you've shared. You have your newsletter and you’re active on LinkedIn in terms of the content you're putting out there. What's the best way for people to learn more about you or reach out?

Alex Pattis: As you said, I'm active on LinkedIn as Alex Pattis and then follow my newsletter, Last Money In. We post every week, doing a deep dive on something in venture capital through the lens of a syndicate lead. We put a lot of thought and effort into that each week.

Jason Kirby: It's definitely a good read for aspiring fund managers or syndicate leads, or people that want to get exposure to how venture works. I feel the content you're putting out, Alex, is super educational, very valuable, and real—giving real insights into what's going on.

Don't put that you're an investor if you only joined a syndicate—you might need that good deal you won't get. It's been great having you on the show and we look forward to including all those links in the show notes for everyone to dive into and learn more from. Thanks for sharing all your insights.

Alex Pattis: Well said. Yeah, this was fun. Appreciate you having me.

Jason Kirby: All right, great. Thank you.