What are the best practices for syndicating a deal with a startup that has already received seed funding?

In VC, thinking inside the box is like using a flip phone in the smartphone era. If you are focus on the traditional metrics – traction, team, market – is a good start, but let's stir the pot a bit. Ever heard of Airbnb or Twitter? They were once perceived as wild, off-the-chart ideas. My point? While it's wise to evaluate a startup's fundamentals, the real game-changer is often found in its audacity and potential to disrupt. It's not just about what's on paper; it's about what could be. In the startup realm, 'normal' is just a setting on a dryer. So, yes, do your homework, but also don't shy away from the unconventional. After all, in our world, the craziest ideas are often the ones that redefine our tomorrow.

Founders are always fundraising! While a round may have closed, it’s is possible to negotiate a seed extension or seed+ by bringing together strategic investors that will add significant value to the cap table! Not all capital is the same and a founder will be more willing to take additional capital if the people participating in the syndicate bring sufficient social or knowledge capital to bolster the startup’s positioning to unlock revenue and scale its business model(s)!

In recent trends, juggling syndicated transactions with seed-funded businesses is like doing a tango in a tech-savvy, hyper-growth environment. Remember to add some unorthodox insight to negotiations. Ask, "If you want to fly with the eagles, don't swim with the ducks." To put it simply, respect established structures and rights but also use bold, inventive phrases that question the norm. We pioneer a world where playing it safe is riskiest. A contract that sings and matches the startup's rising goals is ideal. They say, "In a world of algorithms, hashtags, and followers, know the true importance of human connection." Accept this philosophy and let your deals show strategic and personal wisdom. Good luck!

The data room is the most critical part of the due diligence. A well curated data room instills confidence and makes the due diligence process extremely efficient. I’m also a big believer of sharing the investment memo, which is a narrative of the pitch deck but serves the purpose of preempting many of the questions that may come up during DD.

There are several ways to think about this. As a fund you can decide if it is equity or the quality of the syndicate that you are optimizing. You may need to compromise a bit on the stake you have if you join a syndicate. Beware to allow too many people unable to follow in future rounds. You will end up with dead/u useful investors. Example of this are angels. They can be tremendously helpful but it is recommended to allow them to invest the minimum that is interesting for them to avoid the above. This way you get the benefits of their network and advice without the downside of having a part of the investors not able to follow.