The Story
Alex Pattis turned $1,000 into a $60 million investment fund through a loophole called "The Syndicate." He's invested in over 275 private startups - all as a side hustle while working a full-time job. It's a 70/30 split: 70% day job, 30% VC world.
A Syndicate is an alternative approach to venture capital. Instead of investing in a fund that deploys on your behalf, it provides direct access to specific deals and allows limited partners to participate with as little as $1,000. Platforms like AngelList, Sidecar, and Carta enable individuals with zero AUM to set up SPVs (Special Purpose Vehicles) and invest alongside tier-one VCs.
Alex's first deal: invested $1,000 in a company raising $2M at a $6M valuation. That company recently raised at a $500M valuation - a 2,000-3,000% return.
Key Insights
How Syndicates Work
- •You identify a great founder/company to invest in
- •Set up an SPV through platforms like AngelList
- •Reach out to accredited investors to participate
- •Bundle checks to meet minimum thresholds
- •If you invest $1K in a $100K SPV, you own 1% of the entity on the cap table
The Business Model
- •Make money through "carried interest" (carry)
- •After an exit/IPO, take 20% of returns above principal
- •Investors get 80% of profits
- •"I only make money if I return capital to my limited partners"
5 Ways to Source Deals
- •Co-syndicating with other syndicate leads who have larger allocations
- •Relationships with VCs - built "deal flow hustle guy" brand, shared deals for years
- •Portfolio founders - invested founders refer their founder friends
- •Angel investors - share deals both ways
- •Investor base - LPs are often founders, CEOs, heads of product who see deals
How to Evaluate Deals
- •Founder/CEO relevance to the business (most important)
- •Are they in it for the long run?
- •Market fit based on previous roles/companies
- •Multi-time founder? Previous success?
- •How big is the market? Is it growing?
- •Early signs of product-market fit
- •Who is co-investing? (Piggyback on institutional funds' diligence)
The Deal Process
- •Secure allocation from founder
- •Put together deal memo (2 days)
- •Set up SPV in parallel
- •Send materials to investor base
- •Give 1-2 weeks for decisions
- •Close SPV and wire capital to company
Time Investment
- •Morning person - gets up early for a couple hours before day job
- •Late evening meetings
- •Weekend coffee with founders
- •"70/30 split of full-time job vs side hustle VC world"
Key Advice
"Start building a network of folks who have unique access to deals. Have a Pay It Forward mentality. Most VCs won't give a shit about you - your check is small, you're insignificant. But if you share high-quality deals or source a deal they actually do, you'll see the relationship change. I sent 10-20 deals to some VCs before they participated in one - now they share deals they're leading with me."