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PART II: Learnings from pioneering LP syndicates

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PART II: Learnings from pioneering LP syndicates

(i) Deal-making lifecycle, (ii) waiting around, (iii) scarcity, (iv) lies, (v) friyay!, (vi) learn-by-syndicating and (vii) consistency

David Cruz e Silva šŸŽ™
Jan 5
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PART II: Learnings from pioneering LP syndicates

www.eu.vc

Once again, as we close another syndicate here at EUVC, here are my core learnings from raising our second EUVC LP Syndicate. As usual, I’m a strong believer that many of these learnings are transferable for emerging GPs (and in this case, founders as well).

🤫pssst… sometimes we have some stealth LP syndicate fundraises happening over the counter; drop me a dm if interested. They are hot, quick & dirty.
  1. It ain’t over till it’s over

  2. Don’t wait around

  3. The feeling of scarcity, comes from….. scarcity, duh!

  4. Don’t freaking lie

  5. Don’t call during the weekend

  6. Learn-by-syndicating

  7. On North Stars & consistency


What brings us together?

šŸ¤ Building network and relationships across Europe

šŸ“– Gain insights, access to best practices & develop skills

šŸ¤‘ To get exposure & access to the asset class that we all love

Seems that the opportunity to get connected to the best European venture investors while reaping LP returns is a pretty good combination šŸ’”

Apply to join the EUVC LP syndicate


1. It ain’t over till it’s over

It feels obvious I know 🤦. But hey, we learn by getting things wrong. Let me put it like this, don’t assume it’s a done deal unless it’s effectively a done deal. From committing to the deal, signing all the docs, doing KYC and transferring the money, a lot of šŸ’© can happen when onboarding syndicate investors. Often times, without fault of any of the parties involved, things might not go through the first time.

To add to it, people naturally tend to put in extra effort in the beginning of any project. And, as time goes by, we relax, let things slide and deadlines slip. Typical project management concepts apply to syndication. And I’ve fallen victim of overlooking them. Hopefully never again.

How I now think about the time effort of executing on each syndicate

2. But don’t wait around

The above means you need to wait a bit and allow for some mistakes and admin ā€œdo-oversā€ ā±. This does feel like the opposite to engineering FOMO tip I’ve shared in my previous post.

I believe the best approach is this fine balance between the two. Don’t wait around for people to go from expression of interest to commit to money in the bank, but do give them enough time to go through the (often painstaking) admin and onboarding processes.

EUVC syndicate investor waiting for compliance check

Again, it all comes down to the maturity level of your investment club/syndicate, as well as to what you’re optimising for.

At EUVC for each syndicate we optimise for value add šŸ’„. Similarly, at the macro level we are optimising for volume over size. Meaning, we adversely select unresponsive, low value add and slow investors.

3. The feeling of scarcity, comes from….. scarcity, duh!

Andreas reacting to a ā€œpseudo-oversubscribedā€ deal that re-surfaces in a new platform every week

This one is just plain common sense. Never, seriously never 🚫, market a deal as access constrained and oversubscribed if it’s not the case. Short term thinking rarely comes with much gains for either side of the table.

One day, I received this message:

Would I be able to 100% confirm you and have you wire in the next 2 days if we can give you the allocation?

Me:

[šŸ¦—]

A couple of weeks later:

We might have an opening and I should be able to invite you today if you confirm your interest.

Me:

[🤭]btw, almost two months later the deal is still fundraising

Learning: don’t fake scarcity or access constraints. Smart people can always see through it.

4. Don’t freaking lie

This one is super connected to the above. A couple of months ago I get pitched an allocation in a hot šŸ”„ deal (FYI it's a syndicate), but I needed to move quick.

Lo and behold, my co-founder gets pitched the EXACT SAME opportunity. More than 10 days after...

Not only does this hinder trust it paints a really bad picture for everyone else leading syndicates and the VC ecosystem as a whole.

F#%& you Mr. Syndicate Lead X and please, to all other syndicate leads, don't lie. Think long term and build trust relations.

5. Don’t call during the weekend

So… again. This is one of those that sounds stupid AF. But for our Startup Wise Guys deal I made the silly mistake of calling the capital of our investors on a Friday morning; without realising that the deadline was automatically set for Sunday šŸ¤¦ā€ā™‚ļø.

Replies like this followed:

Hi DavidĀ 

Ive seen swg capital call with deadline on 16 Oct

- I think that 2-3 days is a super short ddl

- I wont be able to do that by the end of sunday since my bank doesnt do transfers during weekends

Whats the ā€œrealā€ deadline here? Monday? Tuesday?

Well, this is annoying. Not only I’ve created a non-value add interaction with an investor, he’s now questioning how transparent/honest we are about the deadlines. Huge šŸ’© show. Anyway, dealt with it by explaining it was an automatic deadline and apologised for the inconvenience. Stupid mistake….

6. Syndicates are a great way to learn

We recently launched an episode with our dear friend Romain from Satgana (first close recently announced šŸŽ‰).

Romain is a super cool dude and a great friend of

The European VC
. The episode ended with a quite cool short chat about how syndicates can be a great way for an emerging manager to fine tune strategy, thesis and learn about investors/LP appetite. Launching and running an angel syndicate is kind of the simplest form of a VC firm. At least, it’s the easiest place to start. Loved it. Check it out šŸ‘‚ below:

7. Staying true to your North Star

In one of our most recent episodes we had the pleasure of hosting a legend in VC: Reshma from Seedcamp. Reshma took us through the ins and outs of Seedcamp and highlighted an incredibly simple but powerful concept.

Having a North Star and staying true to it. In our conversation (which you can listen to šŸ‘‡) that kind of evolved to the concept of being consistent in everything we do.

Reshma went on to explain what this meant for deal making, operations, fundraising, community management, etc. A couple of messages really resonated with me:

  • Deal making: focusing on deal 100% aligned with your North Star; nothing else

  • Fundraising: only accept LPs that get your North Star

This for me was a great validation point to simply kick/ban a couple of investors in our syndicate who are…… to be honest: assholes. These are, easily, 10 year long relationships. No point in having idiots bothering you for that long.


What brings us together?

šŸ¤ Building network and relationships across Europe

šŸ“– Gain insights, access to best practices & develop skills

šŸ¤‘ To get exposure & access to the asset class that we all love

Seems that the opportunity to get connected to the best European venture investors while reaping LP returns is a pretty good combination šŸ’”

Apply to join the EUVC LP syndicate

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PART II: Learnings from pioneering LP syndicates

www.eu.vc
3 Comments
Alex Pospekhov
Jan 8Liked by David Cruz e Silva šŸŽ™

Brilliant piece !!!

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2 replies by Andreas Munk HolmāœŒļø and others
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