[Section 1] 1st Principles - Highlights
Core Principles & Methodology
- The syndicate model operates on first principles, forming the foundation for all tactics and strategies.
- Syndicates act as market makers, bridging investors (LPs) and startups.
- Investors receive curated deal flow, diligence, and global-scale deal sourcing, while startups benefit from a clean cap table and six-figure checks.
- The key value is pre-built investor relationships, not just capital, making syndicates a powerful expert network.
Four First Principles
- Proprietary Networks – Investor relationships are the core IP; syndicates must build and own these.
- Trust Over Money – Investors are not ATMs; maintaining engagement and credibility is critical.
- Building for Scale – Scaling capital requires automation and communication to prevent bottlenecks.
- Data-Driven Approach – Tracking metrics ensures efficiency rather than relying on trial and error.
Key Trade-offs in Syndicate Building
- Deal Volume: More deals increase diversification but risk diluting investor trust and capital.
- Investor Network Size: A larger network improves funding reliability but increases management effort.
- Average Check Size: Higher check sizes simplify fundraising but increase concentration risk.
- Diligence Depth: Better diligence preserves trust and raises more capital, but fewer deals reduce diversification.
Key Takeaways
Syndicate building involves philosophical design choices—balancing deal flow, investor engagement, and execution efficiency to create a sustainable and scalable model.
