Last Money In

Last Money In hosted our 5th Quarterly Syndicate Lead/Investor Dinner w/Sydecar yesterday in New York. These dinners are really the only time syndicate leads get together in-person, therefore we look forward to continuing these dinners and meeting/learning from more investors & syndicate leads :) A big thanks for coming Jonathan Wasserstrum, Ben Zises, Jeffrey Shu, Drew Austin, John Gannon, Sara Garson, David Yakobovitch, Matthew Weinberg, Chris Bordeaux, Rahul Chaudhary, Zachary Ginsburg, Jake Don Sing. (we will continue to work on our group picture taking skills)

Thanks for the feature beehiiv!

Thanks for the Last Money In x Deal Sheet feature, beehiiv!

The Ideal Angel Investor: Profiling 4,000+ SPV Limited Partners Since launching our syndicates, we've had over 4,000 investors invest in our SPVs. In today's Last Money In post we explore the characteristics that make certain accredited investors particularly successful as angels and LPs in these vehicles. Here’s a list of the typical profiles we have and see in our syndicate (not exhaustive): • Founder/Co-founder • CEO • COO • CTO • Engineer (really any level) • Head of Product • Head/Director of Operations • Owner (small business or bootstrapped business) • Account Executive (typically at a larger co.) • Family Office investor  • Venture Capitalist • Banker • Private Equity investor • Various roles interested in tech outside a major tech hub SPVs in venture capital are ideally suited for investors who bring a powerful combination: significant capital alongside battle-tested operational expertise in technology and digital markets. We've found that tech CEOs, founders, and senior leaders (regardless of department) make exceptional SPV investors. Why? They've lived through the challenges of scaling businesses, giving them an invaluable lens for evaluating early-stage opportunities. They also come with a rolodex of relevant introductions. Link to full post in comments. -- Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with ~60k+ subscribers. Written by Zachary Ginsburg and Alex Pattis, global syndicate leaders with 800+ VC SPVs closed.

Stock options have long been heralded as the golden ticket that transforms employees into owners, aligning their interests with the company's success while providing a path to potential wealth creation. As one example - when Cisco acquired AppDynamics for $3.7 billion in 2017, a reported 400 of the company's employees became millionaires through their stock options. The founder, Jyoti Bansal, stated that "dozens of employees" had outcomes of $5 million or more. Yet the conversation around startup stock options becomes a lot more nuanced if an employee is fired, leaves early and/or wants to take early liquidity while the company’s still private. This can often be the reality:  - Join a startup, have the “prospect” of life-changing wealth - Work ~4 years to earn your equity - Need $50k-$100k+ cash to exercise options and pay taxes - Even then, you might not be allowed to sell your private stock and with no guarantee of a positive outcome  - Meanwhile, founders and investors can often sell more freely In this week’s Last Money In article, Alex Pattis and I dive into this very nuanced topic specifically covering  - How stock options work today and the true cost to exercise options  - The large human cost of the current system - Why companies block sales and why these reasons don’t necessarily hold up  - Potential solutions for what a more fair system could look like Link to read the article (for free) in the comments. Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with over 50,000 subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.

The Valuation Dilemma: Raised at a high valuation, so now what? (sharing this from this weeks Last Money In post) There were so many SaaS, ecomm, fintech and other startups that were able to raise capital quickly, and at high valuations (2x, 5x, 10x, 50x of what they’d be valued in today's market). I’m not going to pretend our syndicate did not participate in many of these rounds and companies… we did. We invested alongside all the tier 1 VC’s (and backed great founders) out there during this time while the capital was flowing and we did not see a sharp turn right around the corner. But now those same companies find themselves in extremely difficult funding environments and situations. These startups that raised at exceptionally high valuations during the bull market are facing many unique challenges today including: Valuation Mismatch: Current market conditions often don't support previous valuations, leading to potential down rounds or in many situations small internal rounds or no rounds because founders and existing/new investors cannot agree on terms. Example: Peloton at one point was valued at around 23x sales; today it's achieving a 0.85x sales multiple or almost 97% multiple compression. Higher Bars for Growth: To justify their valuations, these companies need to demonstrate exceptional growth and progress. Most of these companies are trying to figure out how they can get back to their recent valuation in 1-3-5+ years with limited capital needs i.e. do it without heavy dilution. Burn Rate Pressure: High valuations often came with high burn rates, which are now unsustainable in the current climate. Most companies flipped the switch and performed massive budget cuts and got rid of many employees, to as quickly as possible, figure out how to get to profitability or extend their runway many years down the road. Investor Expectations: Previous investors may be resistant to lower valuations, complicating new funding rounds. Many founders are now upset that they sit in cap table purgatory even when the VC’s agreed to these terms previously. I’d also imagine (and have seen) a bunch of VCs stepping up to lead internal bridge rounds to help extend runway to get to the next milestone, next funding, or profitability. Full post in comments. -- Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with 55k+ subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.

Why Startups Are Shutting Down (Right Now) in Droves Today, Last Money In published a piece on what’s behind the startup shutdowns we are seeing right now, and how we got here. Link to post in comments. The startup landscape is experiencing a seismic shift. In Q1 2024 alone, 254 venture-backed companies went out of business, many of which have previously achieved nine figure valuations. Just last week brought a sobering cascade of LinkedIn posts: founders of AI startups, direct-to-consumer brands, and fintech platforms all penning heartfelt goodbyes to their teams and customers. These weren't just failures—they were casualties of a fundamental market reset that's forcing us to reexamine how we build and value early-stage companies. The reality is that the past couple of years have been a rollercoaster for the global economy and startups that raised venture capital. We've emerged from a bear market that saw significant downturns in public equities, cryptocurrencies, and other asset classes. This market downturn has had a ripple effect on the startup world, creating a challenging environment for startups to navigate and/or stay afloat. In this post, we’ll cover the aftermath of the bear market we are seeing play out in real time. -- Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with 55k+ subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.

How often were Management Fees charged on SPVs (a look at 833 SPVs)? Last Money In partnered with Sydecar to share SPV management fee data from Oct 2023 to Sept 2024. We used this dataset to highlight a number of findings and trends we are seeing as it relates to management fees charged on SPVs. Across the 833 Sydecar SPVs: •40% of these vehicles did charge a management fee. •60% of SPVs run on the Sydecar platform did not take a management fee. •The average management fee taken was 2.86%. •The median was 2%. •The range was .2% to 20%. Of the 40% of SPVs that did take management fees: •21% took a 2% management fee, making this the most common management fee used •21% of co-investment SPVs (SPVs that were created alongside a Sydecar Fund+ committed capital fund) charged a management fee. Of the management fees taken on a co-investment SPV: •Average management fee = 1.19% •Median = 1% •The range was .75% to 2% % of deals charging management fees by funding round: •Pre-Seed = 25.21% •Seed = 36.43% •Series A = 37.10% •Series B = 49.30% •Series C = 40.91% •Series D = 61.90% •Series E = 75% •Bridge Rounds = 41.18% -- Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with 50k+ subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.

VC SPV Trends Data → Q3, 2024 As we enter the final quarter of 2024, we've compiled a comprehensive analysis of the SPV ecosystem trends observed over the past three months via our newsletter Last Money In. This report combines our firsthand insights as active syndicate leads managing deals and collaborating closely with LPs, along with quantitative data generously provided by our partners at Sydecar, the best-in-class SPV and fund administration platform for venture capitalists. In this post we’ve split this into 2 sections: 1) Quarterly insights we’re seeing in the SPV ecosystem (Zachary Ginsburg and I have run over 180 SPVs in the trailing 12 months)    2) A deep dive into SPV management fees based on 833 SPVs run on Sydecar’s platform in the trailing 12 months Some of the topics in this post include: - Breakdown of management fees on 833 SPVs run via Sydecar - More willingness to pay for management fees - Slower for LPs to commit to deals - LPs are increasingly picky at Seed, but the top deals still raise $$$ - Many LPs write the minimum check acceptable in syndicate - and much more!! Link to full post in comments. -- Powered by Sydecar, Last Money In is the most actionable Venture Capital newsletter with 50k+ subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.

Why Your VC Portfolio May Seem to Be Underperforming (And Why That's Normal) If you’re new to the VC asset class, you might be feeling discouraged by the apparent lack of returns in your portfolio. For most firms this is a normal part of the VC investment cycle, known as the J-curve The J-curve shows typical VC investment returns over time: Initial dip: Early-stage investments often show negative returns due to: - Upfront costs and fees - Startups failing fast (60% fail between pre-seed and Series A) Upward trajectory: After several years, successful investments start to generate positive returns through: - Maturation and success of portfolio companies - Exits (acquisitions or IPOs) - Exponential growth of successful startups The Reality of VC Returns - it often takes 5 years or more to materialize. Take Figma: the Seed round in 2013 at $0.09 per share; 5 years later in 2018, it was only marked up 3.7x on a price per share (pps) basis. However 2 years after that in 2020, it achieved a 51x pps markup against the Seed and 1 year after that in 2021, it achieved a 237x pps markup against the Seed; meaning ~98% of the returns for Seed investors in Figma took place 5 years post entry investment. And this pattern is normal for many outlier winners. This is all to say the outlier winners can take 5+ years to significantly impact your TVPI/IRR, etc. so if your VC portfolio isn’t performing early it isn’t necessarily cause for concern. So what should you take away from this:  - Patience is crucial: Expect to feel potentially discouraged for the first few years. - Portfolio construction matters: Aim for at an absolute minimum 25-30 investments at pre-seed / seed (the data suggest much more as missing the outlier is extremely costly) as you need a big winner for the j curve to truly take hold - Access: Ensure you're getting into promising deals; shots on goal help but you need the access If you’d like to read Last Money In’s full deep dive into this topic, we’re including it in the comments for full reading. Powered by Sydecar, Last Money In is the most actionable venture capital newsletter with over 50,000 subscribers. Written by Zachary Ginsburg and Alex Pattis, the global syndicate leaders with 800+ VC SPVs closed.