Breaking into Venture Capital through Syndicates

Zachary Ginsburg, Founder & GP at Calm Ventures, and Alex Pattis, GP at Riverside Ventures, have operated across the venture capital ecosystem, with roles as operators at early stage startups, to investment banking, and now as high-frequency syndicate leads.

With over 700 SPVs under their belt, we sat down with Zach and Alex to learn more about how they integrated into the VC community as they transitioned into investing, how they turned their passion into Last Money In, and got an inside look at the new SPV course they’re creating in partnership with AngelList.

Responses have been edited for clarity and length.

Tell us a bit about your background and how you got started investing in startups?

Zach: I’ve spent the last 10+ years in financial services and startups but, even before then, I was always very entrepreneurial. In lower school, I sold baseball cards. In middle school, I resold wholesale candy. Post-grad, I moved to San Francisco to try my hands at a dating app startup (very cringe in hindsight), which didn’t make it. After that, I started my professional career working in Investment Banking, focusing on software/services M&A transactions and capital raises.

Once I started my journey as an investor, I joined the AngelList ecosystem as an LP to invest in startups. I couldn’t believe the platform provided access to generational companies like Notion, Cruise, etc. I eventually joined a growth fund before starting my own syndicate and venture firm, Calm Ventures. Since 2020, we’ve put together 450 SPVs, including over 100 SPVs in the last 12 months.

Alex: I spent 8 years operating across two early stage startups in the healthcare tech space. First, I joined as employee #11 at a data analytics company as their first business development/sales hire and the other as the first employee, pre-launch for Market Access Transformation. We grew the business profitably, sold a piece to private equity after 5 years of operation, and then, about a year later, we sold the company outright for a nine figure exit.

I started investing as an angel and looked to write small checks into a number of early stage startups and eventually became an LP in a couple syndicates, including Jason Calacanis’, which was where I learned about SPVs and how they operate.

The more I learned about syndicates, the more I gravitated towards this investment strategy. I liked the deal-by-deal flexibility for those running SPVs and the optionality for really getting to decide where to allocate funds. After about a year of angel investing, I started doing it on my own before finding my way to AngelList, where I ended up partnering with Bryan Rosenblatt, who went on to become a partner at Craft Ventures. We later agreed to partner, with me operating Riverside Ventures, which I've now been doing for about 4-5 years.

One thing unique to the VC space is the strong sense of community. Can you share with us how you've built your network?

Zach: There are extremely strong network effects in this ecosystem. When I first started syndicating on AngelList though, community was, candidly, not as top of mind as it should have been. My focus was to continually deliver value, mainly in the form of high quality deal flow to LPs and being a great partner to all who helped me. As a result, my network took off – I started to have a lot of scouts, VCs, external partners and startups reach out to me wanting to connect. I was honestly lucky it happened so organically and it has since snowballed from there.

Today, my view hasn’t changed significantly, but my process is a bit more purposeful. I want to ensure the content and advice we’re offering is extremely thoughtful, transparent, and engaging that people can’t find elsewhere.

Alex: A lot of creating my network has been building trust and adding value to LPs in the community. I think part of the beauty of syndicates is the LP base - it's a diverse group of individuals with all sorts of backgrounds that can add value in many ways, whether it's through their expertise, their network, their access, or whatever it may be.

From a trust perspective, I’ve found that being consistent is what’s most impactful - whether you’re upmarket or downmarket, you should be consistently syndicating deals, keeping folks engaged, and building a strong brand. Nobody will invest in every deal we do, but I think they enjoy the fact that they're consistently seeing high quality deals offered via the syndicate. I believe those who truly take a longer-term strategy and focus on building transparency and a strong syndicate brand versus the short-term approach of “how do I get this deal done” will be the ones who succeed for years here.

You recently started Last Money In. What was the goal when you created it?

Alex: There's no shortage of blogs and podcasts about venture capital. But when focusing on SPVs within venture capital, we thought there was a major gap. When I was starting out, there was no content that really taught me the game of running SPVs. I learned by doing it on AngelList. Zach and I felt there was a big opportunity on the content side for us to transparently and fully share our learnings after doing hundreds of SPVs and allocating combined nine figures in capital, essentially all via SPVs.

Zach: Building off of what Alex mentioned, there are over 20M households that qualify as accredited investors in the US and the vast majority of them aren’t even aware of the Syndicate/SPV ecosystem. We not only want to help bring those investors into the ecosystem, but teach them how to be successful in it.

For emerging managers and VCs, we hope to expose an alternative path to the traditional venture fund route. While working for a fund has a lot of advantages, we want GPs/VCs/Scouts/etc. to understand that the SPV model is a great option.

You're also in the process of launching an educational course for those looking to launch SPVs. Tell us about that.

Alex: The course goes in depth on how to launch a syndicate with actionable steps. We’re taking both of our key learnings and pinpointing specific strategies that helped us grow. We’ll go over growing an LP base, accessing the right deals, and specific decisions that can help ramp up more deal flow.

Zach: Exactly!This is really the purpose of the course - to provide a step-by-step playbook to get a syndicate launched, including everything from branding, to launching via AngelList, to best practices for running it. We are also offering every person who buys our course a post-course call to answer any questions they may still have. Ultimately, we hope this course creates another 100+ awesome GPs (part or full time) who can contribute to this ecosystem.

We’ve partnered with AngelList on this course because we are both AngelList loyalists. AngelList enabled me to become an emerging manager early in my career and so many others I know in the industry. We love this ecosystem and know the platform probably as well as anyone, so it made sense to align with AngelList on this new offering.

Alex: AngelList has been an awesome partner and, frankly, neither Zach nor I would've been able to do 700+ SPVs without AngelList. It's set up to be extremely turnkey for launching a syndicate, onboarding LPs, identifying new LPs, and running the backend processes. It's only right for us to partner with AngelList on this course since we discuss a lot of AngelList-specific strategies.

What’s your advice for investors starting out?

Zach: Start slow, have a plan, and do your research! I often see LPs getting excited about the prospect of investing in startups and investing too much, too quickly. Evaluate 100 deals before writing your first check, to bypass a lot of the excitement and exuberance that comes with entering this ecosystem. The reality is startup investing is very hard, so set a plan for how much capital you will set aside to avoid overinvesting. You can prepare by reading all of AngelList’s and other key VC blogs, checking out Jason Calacanis’s Angel, Venture Deals, and listening to podcasts like 20 Minute VC, and even newsletters like our Last Money In to learn as much as possible before entering this space.

Alex: Back syndicates to start ramping up dealflow! Pay attention to every aspect of the deal and don’t be afraid to ask questions! What's the founder’s background? What are the terms? Why is a tier one firm backing this company? Why does this founder seem like a great fit or a terrible fit for their business? Meet as many founders as you can and read up on deals to actually be able to understand the differences between deals.

It's very important as an early stage investor and an individual investor in venture capital to diversify and stay strong through the ups and downs. While I’m sure this is advice I didn’t pay attention to at my start, I should have! Just know it takes awhile to really understand the space, so as Zach mentioned, try not to jump in too deep, too quickly!

Conclusion

Zach and Alex’s venture capital journeys are built on first-hand experiences, continued learnings, and networking. They are committed to empowering a new generation of investors and knowledge sharing within the investing community.

Looking for a playbook on best practices when launching your first SPV? Check out Zach and Alex's new course here (with a special discount of $150).

‍Ready to launch your SPV today? Get started with AngelList.