Alex Pattis’ Post

Yesterday we launched our 35th issue of Deal Sheet. It's a curated list of private market SPVs being run by the best syndicate leads (60+) in the ecosystem... and comes with discounted carried interest. We send it out every Monday and yesterday was our 35th issue, which included 7 deals. 7 deals is high for us as we typically share 3-5 deals per week. When we launched Deal Sheet, Zachary and I were committing to curating/sourcing high quality deals every single week. By committing to this, we're committing to not taking a single week off. We haven't yet. We've now proven we can do it for 35 weeks in a row (and for a growing customer base of angel investors/LPs). The aim is to grow the SPV partner ecosystem, which will allow for better and better access going forward, providing the best access to private market deals (pre-seed through pre-IPO). If you are a syndicate lead, we'd love to work with you!

We typically invest $250k into pre-seed rounds which implies that we don't / can't lead deals - just follow-on. But the truth is that sometimes we MUST lead a deal for the round to come together at all. The most common scenario is where there's a bunch of investor interest (and even commitments) in a company but everyone is waiting for the elusive lead investor to materialize. The lead typically sets the terms of the round, does the due diligence and issues a term sheet and closing timeline. While that may seem like a heavy lift, at the pre-seed, we mostly use Safes and we don't take board seats so it's really not much different from when we follow-on. The market is wonky and investors are more hesitant than ever to set terms - the upshot being that rounds can drag on for months. I'd rather see founders building and selling than distracted with fundraising for an extended period of time. In fact, just last week we decided to lead a round and we have another two in the pipeline. So, if you're an investor who can lead, you should consider it 🙌🏽

It is amazing how many Series B extension rounds I am seeing. Most of these deals are "ventury" in nature - meaning: 1) Burned a boat load of cash 2) Took coastal VC capital The rounds I am seeing are convertible notes weird conversion metrics or some type of warrant booster. The problem is that even if the budget gets hit- the valuation caps still reflect at 10-12x NTM ARR. The things investors will do to not write down their book.

💼 Closing Deals for Our Investors is Top Priority 💼 At the end of the day, it’s all about delivering value to our clients. We work tirelessly to secure the best off-market opportunities and close deals that create strong returns. From start to finish, our focus is on making each transaction seamless and profitable. Let’s keep building wealth together! 📈 #DealClosers #RealEstateInvesting #InvestorSuccess #OffMarketDeals #RealEstateOpportunities #PortfolioGrowth #WeGetItDone #LeeCLT #LeeandAssociates

Final call for Cohort 6 members and Venture Cooperative alumni: join us at 12:30PM ET today to discuss Leading Deals 🤓 We will dive into term sheets, pro-forma cap tables, valuations, considerations for co-investor groups, and deal syndication materials. If you have any suggestions for topics to add, share below or DM us 📨

🏡✨ Closed! ✨🏡 We just closed on a fantastic fixer-upper for one of our savvy investors! 🛠️🔑 With some strategic negotiations, we secured an amazing price on their behalf. We're eagerly anticipating the incredible transformations they'll bring to this house! Stay tuned for updates on this exciting journey! 🏡💪 #StJosephRealtyGroup #FixerUpper #InvestmentProperty #RealEstateInvesting #DreamHomeInTheMaking

Founders, before you get too excited (or disappointed) by the valuation on your term sheet, do the math! A higher valuation doesn’t always mean less dilution or a better overall deal. A critical variable is whether the option pool is included in the pre-money calculation. The Option Pool Shuffle refers to a trick where investors push for the option pool to be included in the pre-money valuation. This increases the effective price but results in greater dilution for the founders. Make sure you understand how the option pool impacts your valuation and dilution or you may be in for an unpleasant surprise later. For more tips from me and a dozen VCs on negotiating term sheets, check out "A Founder's Guide to Negotiating VC Term Sheets" in the Featured section of my LinkedIn page. #VCTerms #OptionPool

Behind the Scenes  →  Managing ~5,000 Investors/LPs Syndicate leads can deploy tens of millions or hundreds of millions of capital via SPVs BUT it doesn't come without lots of management when working with thousands of investors. Obviously, there are tons of LP questions and topics you will need to address when running hundreds of deals. Here's some of the topics/questions that keep syndicate leads busy: -Portfolio company updates -Questions about a deal (when LPs are evaluating) -Trying to get into a deal late i.e. in closing or allocation is firmed up -Wanting to cancel an investment into a deal -Asking about liquidity timeline/expectation -Company shut down details -Distributions questions post exit, IPO, company buy back -Path to profitability -Understanding how much capital is committed to a deal (to better predict SPV setup costs) -Confirmation on existing VCs that are following on or not -How much personal capital we are putting in -Our take on why we like a deal -Sometimes not a question, just feedback on why they think a deal we are running sucks What are other popular questions/topics I missed? Zachary Ginsburg, Elana Gold, Amr Al-Shihabi, Drew Austin, Morgan Schwanke, David Yakobovitch, Matt Wilson, MBA, Jeroen Bertrams, Colin Gardiner, Tyler Knight, Ben Zises, Chad Fox, Ohad Gliksman, Stephen Hays, Ali Jamal, Cindy Bi, Joe Tonnos, Jed N., Sam Awrabi

With the sheer volume of deals that end up falling through, it takes sheer volume of dealflow to actually close more deals. ... Yes, you can rely on networking and referrals to come across deals - but is it enough? You might've closed 1 or 2 deals last year. But if your goal is 3-5 this year, then it's not gonna cut it. ... You can't control the output of dealflow from your existing network! You're just playing the waiting game and relying on luck. If you're actually serious about getting more deals closed, you gotta do more. Take control of your own luck! ... How do investment banks and massive private equity firms close over 5 or even 10 deals per year? They've got their own proprietary deal sourcing systems in place. ... If you're ready to level up, let's talk about how we can build you your own proprietary deal sourcing system to blow up your dealflow ASAP. DM's are open ✌️ 👑👑👑👑👑 #mergersandacquisitions #businessacquisition #buyabusiness #dealsourcing #Acquisition #PrivateEquity #businessbrokerage #businessbroker #investmentbanking

The Deal Flow Xchange is a platform designed with one purpose: to make sourcing large amounts of capital easier for everyone. Why DFX: Capital Providers are the ones that approach a deal, as opposed to the status quo of Founders and Deal Representatives reaching out to hundreds of investors and lenders. Flipping this equation: A. Saves Founders and Deal Representatives significant time and money as they do not need to waste months tracking down capital providers and chasing dead ends B. Saves Capital Providers significant time because they are not inundated with pitch decks formatted 1,000 different ways, most of which are not a fit for what they are looking to provide capital to. DFX is built as the new social media platform of private capital, replacing the usual social media feed of thoughts and feelings with a constant stream of deal flow for capital providers to engage with. We give your deals a place to live and a place to network with the right Capital Providers. #dfx #dealflowxchange #investors #lenders #capital #privatecapital #