Investing Through Syndicates

Part II of III: How To Break Into VC

Last week, in Part I of the ‘How to Break Into VC’ series, I discussed how scout programs can be a great pathway to venture capital by investing with other people’s money.

Today, I want to briefly talk about syndicates, a fund concept that is led by experienced angel investors and can be co-invested by people like you or me, if you are accredited.

While this path is less conducive for everyone, it could be a great method for getting your feet wet with investing and learning more about the ins-and-outs of the industry.

Simply put, investing with a syndicate means an expert is leading the investment process and you are putting money into the companies that they select and vet. You are essentially betting on the person to bring you high-quality deals.

The concept was popularized by AngelList, the industry-leading investment platform that now hosts more than 200 syndicates.

It requires a brief online application process that usually gets approved within days. From there, you have access to a large number of funds and investments to consider.

Examples of this include funds ran by successful investors like Jason Calacanis, who famously invested early in winners like Uber and Robinhood.

So how can this lead directly into VC? 

Well, the act of investing in a syndicate is not unlike VC at all. When done well, it involves similar levels of research, due diligence, market analysis, yes-to-no ratios, and networking requirements. 

The difference is that you are letting a specific angel investor take the lead. If you take this path, you can more easily network with other investors and insiders by sharing notes, investment criteria, and hypotheses on what sectors are hot or not.

Finding the right syndicate to invest in should start with a lot of research through AngelList.

In the next part of this series, we’ll discuss how to leverage more traditional networking paths to get into VC.