VENTURING WITH
Good morning!
I had the scoop on a pretty big story yesterday with HyperGuap announcing the launch of their VC fund! You can check out the quick story here.
Next week, we might just be sitting down with Gali from HyperGuap to discuss the fund, relationship with Elon Musk, and his vision for the future.
Also, Just Raised is officially over 4,000 subscribers! Let’s keep rocking and rolling.
Showtime.
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THE INTERVIEW
Sydecar’s Nik Talreja
Pictured: Nik Talreja
Earlier this week, I caught up with Nik Talreja, Co-founder and CEO of Sydecar. Sydecar helps emerging VCs start and run SPVs, handling all back office operations including subscription docs, banking, compliance, tax, and more.
In the conversation below, Nik and I discuss the future of VC, the need for liquidity in the system, and so much more. Enjoy! (This interview is edited for length and clarity.)
Alan Soclof (AS): Hey Nik! Great to connect with you. Can you start off by telling me about Sydecar?
Nik Talreja: Sydecar, in a nutshell, is an extremely easy onramp to becoming a venture investor. If you are new to venture and want to invest in a friend’s company that you think is super exciting, we give you the easiest path to make that happen. We are pioneering a standardized approach to creating investment vehicles, which makes it easier for new investors to get started even if they don’t have a personal team of lawyers and accountants.
Our goal is to grow with you. We want to walk you through launching your first deal, and then help you build a track record, build a portfolio, tell a story, raise a fund. While you focus on that, we’ll take care of all of the nuances and make sure your investors are taken care of.
AS: What do you think can make Sydecar a unique platform versus some of the other fundraising platforms out there?
NT: To start with, we’ve focused on building a product where others have built large operations teams. We’re not a marketplace; we’re the picks and shovels. We want to build tools that allow new and aspiring investors to highlight what is special about them and their access to deals, while also maintaining privacy in their relationships with their LPs.
We’re also pioneering standards for the venture industry, not just because it creates a frictionless experience, but because it creates more opportunities for liquidity that doesn’t currently exist in private markets. That's our vision for the future.
AS: That is very interesting. Are you able to share some more color on that?
NT: So venture is a private asset, which means that there isn't an open exchange where you can sell your shares. There are various reasons for this — we actually just published an article on this topic that talks about the challenges and opportunities around secondary transactions. Creating an efficient secondary market in venture is challenging because of the lack of information sharing, confidentiality issues, securities laws, transfer restrictions and more.
But in order to get more people involved in private investing, we have to create more opportunities for liquidity. Most people don’t want to or can’t have their investments locked up for 5 or 10 years. A lot of the challenges around creating liquidity can be solved if transactions occur within an investment vehicle rather than directly on a company’s cap table.
AS: Are there any companies trying to create something like this?
NT: Carta is working on a marketplace called CartaX, it’s a good fit for larger companies that are ready to navigate all of the hurdles that I mentioned above in order to provide liquidity opportunities for early employees.
But in early stage companies, there is almost no opportunity for liquidity unless an investor goes to the board, gets their approval, and pays the price to execute a secondary transaction. An alternative to that might be that the exchange happens not on the captable but in the investment vehicle itself. That is what we are building toward.
But to make that reality happen, investment vehicles have to be standardized. Otherwise, how do you make an exchange happen? Today, every single law firm or fund admin has a different set of SPV documents, and different structures, which means that you’re comparing apples to oranges. Our goal is to standardize the atomic unit of venture (which is the SPV) and eventually have a pool of vehicles that investors can trade in and out at the SPV level.
AS: I listened to a previous interview you did and you mentioned that you have investors running $100M deals that are entrusting you to run their SPVs. Why do you think they have that confidence in you?
NT: Frictionless, efficiency, and speed is something that everyone wants. We allow our customers to turn around a deal in 24 hours, and they care more about that than about negotiating every last word of a contract. Another part of what makes us special is that we have our customers’ backs. That trust is based upon the fact that we’ve had careers in the legal sphere, in the financial sphere, as fund accountants. We’re an experienced team, and when we try to solve a problem, we don’t immediately look for a shortcut. I think in the product we’ve built, and in the stories we tell, that credibility and trust comes through.
AS: Thanks so much for the time Nik!
NT: My pleasure. Talk soon.
Alan’s Angle:
Liquidity. Liquidity. Liquidity. If you talk to any angel or early stage investor, one of their top frustrations with early stage investing is the lack of liquidity. We all know how hard it is picking a winner in early stage investing in the first place. Even when you are successful, the process can still be frustrating as it can take years and years to see any cash or liquidity from the investment. There will be a serious disrupter, maybe even several, that will make liquidity much easier to come by in early stage investing, and Sydecar’s emphasis on standardization makes me think that Sydecar will be one of them.
Making it happen. What Nik shared with me is not just Sydecar’s vision and dream; it’s what they’re already doing. To date, the company has supported thousands of investors close over $350M in investments/deals. Additionally, the company has established themselves as a leader for the next gen VC, as solo capitalist Nik Milanovic launched his first $10M fund on Sydecar.
Experience. Experience. Experience. Last week, I broke down how most successful founders are in their 40s. The experiences, relationships, and lessons gained during their careers are so often why this is the case – and Nik Talreja is no different. Nik has years and years of professional experience in various disciplines including law and banking, and as a venture investor. There is no doubt in my mind that his experiences have played a critical role in the success of Sydecar.
QUOTE OF THE DAY
“If everyone thinks you are right, you are too late.”
-Paul Hawken, Author & Entrepreneur
RECENT ROUNDS
HomePace
What They Do: Enable homeowners to access home equity
Amount Raised: $7M Series A
Lead Investors: LENX
The Rundown: HomePace enables homeowners to access the equity in their home by receiving up to $250K in cash in exchange for sharing a portion of gains or losses in the home’s value over time.
HomePace has a powerful management team led by CEO Joe Ciancalo, a former Director at Blackrock, and COO Megan Graff, former VP of Derivative Trading at Goldman Sachs.
HomePace is one to watch.
Learn More: Press Release & Company Website
Cartwheel
What They Do: On-demand delivery management platform
Amount Raised: $3M seed round
Lead Investors: Moonshots Capital
The Rundown: Cartwheel is an on-demand delivery management platform for restaurants, retailers, couriers, and more.
The company has tripled its number of customers in the past year and also now serves alcohol and cannabis companies. Some of Carthwheel’s current clients include Portillo’s, PF Chang’s, Charley’s Philly Steaks, and many more.
Learn More: Press Release & Company Website
Charityvest
What They Do: Modern provider of Donor Advised Funds
Amount Raised: $2.2M seed round
Lead Investors: N/A
The Rundown: Donor Advised Funds (DAF) are tax deductible charitable accounts that are becoming increasingly popular. Charityvest has facilitated over $50M in charitable donations from thousands of donors.
Along with the seed round, Charityvest announced the launch of robo-advised, low fee ETF investment capabilities featuring ETFs from Vanguard and Blockrock. Fees on the Charityvest platform are 50% lower than other leading DAF providers.
Learn More: Press Release & Company Website
TRIVIA TIME
Q: How much revenue did Apple earn in just Q1 of ’22?
JOBS
Here are three of my favorite jobs from the startup/VC world today. Click here to post a job on the Just Raised Job Board and get it featured.
Y Combinator, Research Associate
Y Combinator, the startup accelerator, is looking for a new Research Associate! In this gig, the associate will be responsible for evaluating prospective investment opportunities, performing market research and helping companies grow. The best part of this job? Being plugged in to the YC network!
Divvy is SMBs’ dream come true. The company’s free financial SaaS platform is empowering businesses with real time insights into things like company-wide spend, budgeting, and more. After a $2.5B acquisition from Bill.com last year, the company is looking to create even better tools for SMBs and looking to bulk up their data science team!
Grants Operations Manager, Solana
The Solana Foundation is looking to hire a Grants Operations Manager. In this job, the manager will be responsible for supporting the grants and strategy team and be a big part of deciding who is receiving grants to create the next big thing on Solana. Coolest part about the Foundation? Its HQ is in Switzerland!
GOLDEN NUGGETS
Found this article on Spotify’s profitability struggles fascinating
Absolutely hooked on “The Offer,” the story behind the making of The Godfather on Paramount+. Here is the first episode on YouTube!
This Twitter account kills me every time. They take bunts or check swings from the MLB and edit it to look as if it was a HR.
Loved this thread by my teammate The Wolf breaking down the rise of Crumbl, the cookie franchise taking the country by storm. I need some cookies!
FINAL THOUGHT
Thanks for reading! If you have any feedback, please reply back to this email. See you on Friday!
— Alan (@alansoclof)
Trivia answer: $50.6B. Yes, just in Q1, representing 5% YoY growth.
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