What was the inspiration behind the founding of Sydecar, and what motivated its creation?

I practiced law at major law firms like Cooley and Weil and ended up founding a firm called Talis Partners. As part of that process, I ended up building a book of business working with emerging companies in Silicon Valley and beyond. That was really enjoyable. I got to help steer our clients through both legal and  strategic issues. I got really close to a lot of founders and then, into networks of other founders.

At a certain point, I reached a limit on how much I could serve my clients because the practice was small and we didn't really want to scale it. I was doing this more as a lifestyle business and something that I really enjoyed personally. I was like, "Hey, how do I get exposure to these other companies I think are fascinating?" The best way was by investing in them. 

I started off by throwing in small checks myself—$5K, $10K, $15K, $25k. I had tons of conviction, but realized, "Hey! I can't do this continuously, because I'm going to go broke. I'm not going to see a return for a decade." 

That led to me launching my own syndicate with my co-founder, David. We called it 18 Ventures.

It was really in forming our own syndicate that we realized the need for Sydecar. We had formed a small group of individuals who would give us capital to deploy into companies. It was clear though that if we took that group and to a marketplace like an AngelList, we might be far less special, far less unique in their eyes. It might become a lot more difficult  for us to take this syndicate model and scale it into a fund. Our LPs would have access to tons more deal flow through a marketplace, which would make it a lot more difficult for us to stand out from the crowd and build an enduring business. We knew we needed to be intentional in building our LP network.

We realized that there was truly nothing that existed at that time that would allow us to highlight our brand and what’s special about us in the eyes of our LPs AND give them the ability to interact with us in a low friction way with a great user experience. Nothing that would allow us to put the focus on the deals we were bringing to the table and the relationships we were building – because there’s too much friction created by all of the legal paperwork, the compliance filing, etc.

We ended up just creating and administering our own SPVs because that was the only solution that really made sense at the time from a cost perspective. Our deals were roughly $100K-$200K in size. We couldn’t justify spending $12-15k for a deal that size.

Launching and managing our own SPVs really just opened my eyes to the possibilities that could exist if there was a real product company that specialized in helping people build a business and venture capital. It made me realize that so much of the friction when it comes to VC deal making is due to the lack of industry standards.

To make an analogy: if you're a company raising capital at the pre-seed or seed stage, you frequently leverage what's called the YC SAFE (Simple Agreement For Equity) that they've pioneered and said, “This is the one best way to raise money if you're an early stage company.” But if you're an emerging VC, there is no standard. It's a world before SAFEs for companies, where you had hundreds of different forms of convertible notes and you named all different types of KISSes and so on. If you're a VC, there's nothing standardized. 

What dawned on us very quickly when we were creating our own SPVs was that we could create that standard. We could create the one gold-standard for aggregating and deploying funds into private companies, so anyone in our position could just trust a single company that's extremely credible, has a strong commitment to compliance, and provides them to tools to create a real enduring business in venture capital.

What if we could create something for that audience – not only create this document, but a product that really does everything from an automated standpoint to reduce the cost to a point where you can do that $50,000 deal? How awesome would that be?

That's how this business started. It was really for us.