Welcome to episode 11 of Fundraising Demystified. In this episode, we speak with Nik Talreja, the CEO of Sydecar, a deal execution platform for venture investors, specializing in SPVs and fund management. They've recently raised an $8.3MM Seed round bringing their total capital raised to $16.5M.
We talk about their fundraising journey from pre-seed to Seed, extending the runway by raising a bigger round to prepare for the VC winter, how to think about calculating their TAM/SAM/SOM, raising from their target customers, and much more. Let’s dive in.
The Birth of Sydecar: Automating Capital Allocation in the Private Market
Sydecar is a company that automates the creation of vehicles for venture investors, simplifying the process of spinning up an SPV or launching a fund. Unlike traditional fund administrators, Sydecar distinguishes itself by offering a fully automated solution.
With Sydecar, users can handle all aspects of fund creation, including banking, accounting, tax distributions, and compliance, through a user-friendly platform. The automation extends to investor outreach, where Sydecar streamlines communication and allows investors to fund through the platform. Talreja highlights the need for a better way to invest in alternatives as more people show interest in private markets.
Nik shares his journey from practicing law to building a business. After working in a major law firm in New York and later starting his own law practice, he became interested in investing in companies he believed would be successful. Leveraging his knowledge of these companies, he raised capital and invested in several of them.
This experience led him to realize the need for a product that could automate the process of investing in companies, including legal forms, banking, and accounting. Initially intended for personal use, the product gained significant interest from individuals in the ecosystem who wanted to use it as well.
This led to the creation of Sydecar as a business, focusing on standardizing capital flows in the private market beyond venture. Since its inception, Sydecar has grown to a team of 33 people and has facilitated the movement of around $600 million in capital. The company is now expanding its distribution and aims to revolutionize capital allocation in various ecosystems.
Revolutionizing Fund Administration: The Role of Sydecar
We discuss the journey of Sydecar, starting from providing legal services to ultimately becoming their own customers. The founders realized the market potential and transformed the entire company. The name Sydecar was derived from the term sidecar, with a play on the spelling using a 'Y'. It can refer to a cocktail or a vehicle alongside a main fund to deploy capital. The founders recognized the need for Sydecar in the fund administration space due to the lack of efficient documentation and delays in the industry. This need was particularly evident in the VC industry, which emphasizes innovation but lags behind in its own practices.
The fundraising journey for Sydecar involved raising a total of 16.5 million. As their customers were investors, they decided to fundraise in response to market demand. The concept for Sydecar was born in 2020 during COVID when the founders, David and Nik, were investing themselves. Their customers expressed interest in their product, leading them to raise their Pre-seed Round in March 2021, securing 1.8 million.
By cultivating strong relationships with passionate investors, Sydecar was able to attract funding quickly. They turned down conversations with certain funds to focus on investors aligned with their growth stage. With the capital raised, Sydecar expanded their team, despite initially being a non-technical team. They used no-code software to build their product, which exceeded expectations. Overall, their pre-seed journey was successful in positioning Sydecar for growth.
The Rapid Fundraising Journey: Pre-Seed to Seed
Nik shares the story of their rapid fundraising journey, starting with the Pre-seed round. They highlight the role of super connectors in reaching a wider audience and finding their lead investor, Desians. The due diligence process involved conversations about the business and gauging what other intelligent people thought about their business model.
After three months of negotiations, Desians offered a term sheet, which was quickly accepted. The seed round was oversubscribed, raising 6.5 million out of the targeted 6 million. The capital raised was used to scale the team, invest in technical talent, hire engineers and product managers, engage design agencies, and expand the sales team.
In 2022, they received interest from customers to deploy capital and decided to open a customer round to engage with their passionate supporters. They raised approximately a million in that round. Despite market volatility, they achieved their revenue objectives, controlled burn, maintained a strong culture, and outpaced their competition.
In November 2022, an existing investor offered to invest more, leading to a seed extension and raising approximately 7.5 million in total. Looking ahead, they anticipate a competitive Series A round and plan to leverage their existing investor base to catalyze conversations and raise capital next year
The Future of Sydecar: Capital Allocation in Various Ecosystems
In this episode, the discussion revolves around the venture capital landscape, with a focus on whether the company is solely dedicated to venture capital or considering other alternatives. The guest shares their insights on the market opportunity and their journey towards building a unicorn-like solution. They emphasize the importance of ensuring that the business is worthwhile for all parties involved from the beginning.
In the private markets, various vehicles like SPVs and fund structures are prevalent across different asset classes such as venture capital, private equity, real estate, and hedge funds. These vehicles follow similar legal forms, banking requirements, tax complexity, and audit requirements.
However, the current service providers in the industry, including law firms, fund admins, accountants, auditors, and tax advisors, are inefficient and resistant to change. Sydecar envisions a future where sponsors in the private market have access to better tools that work more efficiently. Their focus on venture capital serves as a proving ground to convince VCs to adopt standardized terms and rely on software to run a significant part of their business.
Sydecar aims to apply the learnings from venture capital to other asset classes and believes that various companies and institutions, such as Goldman Sachs, Morgan Stanley, Franklin Templeton, law firms, and fund admins, could benefit from software in their transactions. Sydecar is considering whether to build out the whole experience for every asset class or pursue an embedded play by providing their infrastructure to distribution partners like banks and asset managers, enabling them to run their businesses more efficiently.
Regardless of the approach, there is still a large volume of untapped potential in the manual-driven process of connecting investors to alternative assets, and Sidecar aims to be the place where capital flows.
Calculating Revenue Potential and Selecting Investors
We discuss how to approach market opportunity slides and determine revenue potential for founders. Nik emphasizes the importance of taking a bottom-up approach, analyzing different components within the market, and considering the size of specific segments such as the SPV market for emerging managers, mid-to-late stage managers, fund market, and search funds in private equity.
By piecing together these components, founders can derive a compelling number that represents the accessible market. The hosts also highlight the significance of sidecar market-making, where deals that wouldn't have been possible elsewhere are facilitated through automation and attractive pricing. They caution that the approach may vary depending on the business and ecosystem being targeted.
Furthermore, they stress the need to thoroughly research and understand the actual customer base and acquisition potential to realistically assess revenue opportunities. Rather than relying on top-down estimations, they encourage founders to take a rational investor's perspective and provide meaningful answers to potential questions about market size. By doing so, founders can uncover their true revenue potential and avoid overestimating the market size.
Listen to the entire episode to get all the insights offered.
Links mentioned:
Sydecar website - https://sydecar.io
Follow Nik on Twitter - https://twitter.com/niktalreja
Hosted by Jason Kirby - https://www.linkedin.com/in/jasonrkirby/
Email Jason at jason@thunder.vc
Don't forget to hit subscribe for more episodes!
Thunder Podcast
SPVs, Seed Rounds & Market Reality with Sidecar’s Nik Talreja
Host: Jason Kirby • Guest: Nik Talreja
Published:
Page: https://blog.thunder.vc/raising-16-million-for-sydecar
Video: Watch the episode
Machine Summary
Sidecar’s Nik Talreja details raising pre‑seed, seed, a customer round, and a seed extension (~$16M aggregate), selecting investors in oversubscribed rounds, SPVs for cleaner cap tables, dev‑shop usage, hiring a technical leader, and bottom‑up TAM. Market outlook: disciplined pricing; venture active beyond AI (e.g., life sciences, deep tech, energy). Key entities: Sidecar, Jason Kirby, Nik Talreja, SPV, seed round, pre‑seed, Series A, angels, term sheet, customer round, oversubscribed round, TAM/SAM/SOM.
Keywords: SPV, seed extension, pre‑seed, customer round, oversubscribed, dev shop, no‑code, legal engineering, compliance, venture markets, TAM SAM SOM, Sidecar.
# Robots & AI Access User-agent: * Allow: / X-AI-Training: allow X-Robots-Tag: index, follow
Jason Kirby: That’s a fascinating pre‑seed journey, but I know there’s more to share. So let’s continue on this story of your pre‑seed.
Nik Talreja: Yeah, happy to, Jason. The pre‑seed round came together very quickly, thanks to a few investors who did a lot of the bridging for us to reach a wider audience. Those same super‑connectors led to finding our lead investor, Desiands, who led our seed round which closed in August. We met Desiands just after closing the pre‑seed in March ’21. The conversation started with them getting to know the business. I then saw Dan Kimmerling and Desciens tweet about starting or investing in a business like ours. I wondered if he was trying to compete with us—but that was just his form of diligence to gauge what other smart people thought about our model. As Desciens did diligence and built conviction, they discussed what working together could look like. Over about three months, until roughly June ’21, we got to terms; they gave us a term sheet. We were excited—doors were already opening. We wanted partners, not just capital—people who’d largely defer to us on strategy but be highly supportive in the mission. Building a company isn’t a day’s work, so we looked for partners for the long haul. They proved to be those people. We had a brief negotiation, then moved to accept and fill the round. This was in ’21; we benefited from a bit of froth in the market.
Nik Talreja: It ended up being over twice oversubscribed. We targeted $6M, got ~$12M of interest, and closed with $6.5M of new money into the seed. Between pre‑seed and seed we raised about $8.3M in ’21. That gave us ample runway: capital to scale the team and fuel marketing—and we put it to good use. Over the next year we grew from ~5–6 people to ~20, with much of the capital going to technical talent—engineers, PMs, design agencies. We also grew our sales team; previously it was just me and David running the sales cycle.
Jason Kirby: Thank you.
Nik Talreja: Into ’22 we were noticed by other funds. Investors as customers were taking note. Throughout ’22 we had a lot of interest from customers to deploy more capital into Sidecar, and we had a decision: take the capital or hold for a later round? ’22 was volatile in VC—no guarantee terms would shape up. Given the volatility, we decided it was best to extend runway from ~18 months (mid‑’22) to 24+ months. With capital waiting from customers, we opened a customer round so it wouldn’t be seen as a simple bridge but as engaging passionate supporters already working with us. We raised about $1M in that customer round; great funds came in.
Nik Talreja: Despite market volatility, we did well. We hit revenue objectives, the team shaped up, burn was under control, we didn’t over‑hire, culture stayed strong, morale was great, and we were outpacing competition with our customer base. Come Nov ’22, an existing investor with a toehold in our seed asked to invest more. We negotiated for two weeks and extended the seed at a higher price per share, keeping the same terms to simplify legal. Counting the January customer round and the seed extension, we raised approximately ~$7.5M more. So to date it’s roughly $16‑and‑change raised, thanks to customers and investors. Going into Series A, we have a larger story, a vision we’re excited about. I expect the A to be more competitive; we’ll take the playbook from pre‑seed/seed—work with super‑angels and our base to catalyze conversations—until we’re ready to raise, likely sometime next year.
Jason Kirby: There’s so much to unpack for founders. You’re solving for both customers and target investors, which isn’t typical. Also, you were non‑technical founders yet raised successfully—despite the usual “get a CTO first” advice, especially at pre‑seed. You hacked away, built an MVP, and convinced investors in a competitive space. When you decided to build out the tech—it was janky at first—did you get pushback for not having a technical co‑founder?
Nik Talreja: We did. Back at pre‑seed, the first question was, “Who’s building the product?” Software is a big part of our success, but there’s also legal engineering, compliance, and tax complexity—a differentiator. We’re standardizing how parties engage and agree on fair terms—like YC commoditized the SAFE (which we used for our pre‑seed and customer round), we’re trying to commoditize what an SPV needs to be. That requires buy‑in from attorneys, advisors, auditors. We prioritized getting that buy‑in so we could put forward a largely non‑negotiable yet acceptable standard—like Stripe’s checkout is for e‑commerce—and that’s what we led with.
Nik Talreja: What we hadn’t yet proven was the ability to grow the technical team. Between pre‑seed and seed we added a very strong technical leader (with near‑founder equity) who owned discovery, design, and engineering, and briefly leveraged a trusted dev shop to get from 0→1 while we hired. By the priced seed, we had both the legal chops and the technical chops—reducing uncertainty.
Jason Kirby: Did you hire a dev shop or do it all no‑code yourselves?
Nik Talreja: We used no‑/low‑code and some consultants to make it presentable. For proprietary code we engaged a couple of consultants early—it didn’t work out. After our first technical hire, he brought in a dev shop he trusted to get us from zero to one as we built the team. He stayed hands‑on across discovery, design, and engineering, with the shop supporting. We quickly offloaded from the shop to in‑house engineers.
Jason Kirby: Gotcha. Founders ask me about dev shops a lot. Your approach—use a shop for initial momentum, then phase out—is healthier than spending big and ending up with a static product and no runway.
Jason Kirby: On capital raised from pre‑seed → seed and into Series A prep: are you only focusing on venture, or other alternatives too? And what’s the market opportunity—do you have unicorn potential like a Carta‑type outcome?
Nik Talreja: From day one it had to be worth it for everyone. Across private markets, SPVs and GPLP fund structures show up in VC, private equity, real estate, hedge funds—everywhere. Sponsor‑driven investing shares similar legal forms, banking, tax, and audit needs, historically served by gatekeeping service providers (law firms, fund admins, accountants) with little incentive to modernize. Our vision: as more people become sponsors, they need better, faster tools. Venture is a great proving ground—VCs are likelier to try new tools. If we can standardize terms and get adoption in VC, we can extend to other asset classes. We’re debating whether to build full experiences per asset class or pursue an embedded play—powering banks, asset managers, and service providers with Sidecar’s infrastructure. Either way there’s a lot of untapped volume still run manually. We want to be where capital flows—top‑of‑mind or under the hood.
Jason Kirby: Can you share your TAM/SAM/SOM approach to help founders frame market slides?
Nik Talreja: Top‑down—like saying private markets are $14T and we’ll get 1%—didn’t resonate. We did bottom‑up: size SPVs for emerging managers in VC, then mid/late‑stage, then fund admin; then add adjacent asset classes (e.g., search funds in PE). Pull it together into a compelling, defensible number. Also, Sidecar can be market‑making: some deals happen because our product lowers friction and price—expanding the addressable market. Your mileage may vary by business, but be precise.
Jason Kirby: Exactly—bottom‑up forces rigor. Founders should estimate actual revenue potential, not hand‑wave. Another topic: in your oversubscribed round, how did you choose investors? Did you ask for smaller checks to fit more in?
Nik Talreja: For larger checks, we prioritized authentic partners investing for the right reasons who understood our business and culture. Rounds don’t come together perfectly—commitments arrive at different times. We honored earlier commitments and encouraged later investors to take smaller allocations rather than reneging. We preserved space for angels who could help with product, design sense, talent, or distribution—some as small as $2.5K. The amount mattered less than the value they brought.
Jason Kirby: With your tech, taking a $2.5K check isn’t a problem. For founders new to SPVs—what are they and why use them, including RUV‑style founder‑led SPVs?
Nik Talreja: An SPV consolidates many checks into one entity that invests in your round, so it’s a single line on the cap table and a single counterparty for governance. In later rounds you don’t need signatures from every individual in the SPV; often the company or a representative can act on its behalf. Some argue SPVs simply make for a “cleaner” cap table—fewer names. Historically, many small investors were viewed as a red flag, but today investors recognize the benefits of grassroots participation.
Jason Kirby: I’ve had rounds with dozens of angels—it’s painful to chase signatures later. SPVs alleviate that. You should still keep participants informed, but SPVs keep things clean and expand optionality. Great for letting high‑value angels participate with smaller checks.
Jason Kirby: Switching gears: how have recent markets affected you? What’s your pulse on early‑stage raises?
Nik Talreja: Venture is still going strong. Early ’23 felt tepid with uncertainty, but great deals are getting done across AI, life sciences, deep tech, materials, energy transition, and renewables. I’m more excited about venture today than last year—pricing is fairer and diligence is deeper. Founders showing up now know it’s harder and are more committed. Rational investors are deploying. Sidecar’s having its best year—we exceeded all of last year’s revenue in H1 and are on track for a strong multiple for the year. Macro looks healthy: low unemployment; inflation coming down; markets near highs. The feared pullback didn’t hit as expected.
Jason Kirby: Great to hear. Not everyone should raise, but great deals get done. Nick, anywhere people can learn more about you and Sidecar?
Nik Talreja: Sure—our website is sidcar.io (Sidecar). For me, I’m on Twitter at @NikTalreja. I’m not as active as marketing would like, but if you reach out I’ll respond.
Jason Kirby: Awesome—we’ll include links in the show notes. Thanks for sharing your story and insights.
Nik Talreja: Thank you, Jason.
