_This is a guest post by Sahin Boydas, a serial entrepreneur and angel investor._
People always ask me how I do it. How does an angel investor keep up with a portfolio of fast-growing companies without a big fund behind them? Is there some kind of magic trick?
I’ll tell you the secret: it’s not magic. It’s a system. A very disciplined system built around syndicate investing. And today, I’m pulling back the curtain and giving you a completely transparent, behind-the-scenes look at our exact process. No fluff. Just the real, raw playbook.
Why Syndicates Crush Solo-Angel Investing
When I first started angel investing after my first exit, I was writing checks on my own. It was a rush, but I quickly realized I was playing a small game. I could only get into a few deals, and I was shouldering 100% of the risk. If a company went bust, that was my money, gone.
Then I discovered the power of the syndicate. For those who don't know, a syndicate is just a group of investors who pool their money to invest in a deal. One person, the lead, finds the deal, does the heavy lifting on due diligence, and then invites other investors to join in. It’s a massive win-win. The startup gets a bigger check and a whole army of supporters. The investors get access to deals they’d never see otherwise and can spread their risk.
For an angel investor like me, it’s a no-brainer. It lets us write bigger checks together, giving us a real seat at the table. It also lets us tap into the collective genius of a network of 200+ angel investors. These aren't just people with money; they're operators, engineers, and marketers from places like Google, Stripe, and Netflix. Their expertise is our secret weapon.
Just last year, one of our portfolio companies, a B2B SaaS startup, was struggling with customer acquisition. They had a great product, but they couldn't figure out how to get it in front of the right people. I sent a note to our syndicate, and within an hour, I had three intros to VPs of Marketing at Fortune 500 companies. One of those intros turned into a six-figure deal that changed the trajectory of the company. That’s the power of the syndicate.
Our Syndicate Investing Playbook
Alright, let's get into the nitty-gritty. Here’s our step-by-step playbook.
1. Sourcing and The Diligence Gauntlet
We see a ton of deals. A ton. They come from our network, VCs, and even cold emails. We have a system to filter them, but I still personally review every single deal that makes it to the final round.
Our due diligence process is a gauntlet. We're looking for a few non-negotiable things:
A Massive Market: We need to see a clear path to a billion-dollar market. We're not here to play small ball.
A World-Class Team: I care more about the founders than almost anything else. I'm looking for people who are completely obsessed with their product, who know their market inside and out, and who have a history of just getting things done.
A Product People Love: We need to see a product with a fanatical user base. We look for signs of true product-market fit: explosive organic growth, insane engagement, and near-zero churn.
A Defensible Moat: How will you stop a giant from crushing you? It could be a network effect, proprietary tech, or a brand that people trust.
We run this whole process on a custom-built Notion dashboard. Every company gets its own page with a 50+ item checklist. It’s a grind, but it’s how we avoid the duds.
I remember one company that looked amazing on paper. They had a team of ex-Google engineers, a huge market, and a beautiful product. But when we started digging in, we found that their user numbers were inflated. They were counting free trial users as active users, and their churn was through the roof. We passed. Six months later, they were out of business. The diligence gauntlet saved us from a multi-million dollar mistake.
2. The Investment Memo
Once we decide to invest, we write an investment memo. This is a 6-10 page document that makes our case. It covers the market, the team, the product, the financials—everything. We also have a brutally honest section on the risks and our plan to tackle them.
The memo is critical. It forces us to sharpen our thinking and make sure we haven't missed anything. This is also the document we share with our syndicate to get them on board.
In the risk section, we don't hold back. We talk about everything that could go wrong. We talk about the competitors, the market risks, the execution risks. We want our syndicate members to go in with their eyes wide open. It’s about building trust. They know that when we recommend a deal, we’ve looked at it from every possible angle.
3. The Syndicate Call
After the memo goes out, we host a 30-minute syndicate call. I walk through the memo and take questions. We always have the founder on the call to answer the tough questions directly. It builds trust. Transparency is everything.
The best syndicate calls are the ones where the founder is grilled by the syndicate members. I love it when they push back and ask the hard questions. It shows they’re engaged, and it helps us all get to a better decision. A great founder can handle the heat. They know their business inside and out, and they can articulate their vision with passion and clarity.
4. The SPV (Special Purpose Vehicle)
Once we have commitments, we spin up an SPV. This is just a legal entity that pools all the money from our syndicate members into one clean investment on the cap table. We use AngelList for this. It makes a complex process incredibly simple.
5. Post-Investment Support
Our work isn’t over when the wire hits. We're active investors. We have a platform to track our portfolio companies' progress with monthly updates and quarterly calls with each founder.
We also run a private Slack channel for our founders. It's a place for them to ask for help, share what's working, and support each other. It’s one of the most valuable things we offer, and honestly, it's the part of the job I love the most.
Just last week, a founder posted that he was struggling to hire a senior engineer. Within a day, he had three referrals from other founders in the group. Two of them are now in the final round of interviews. That’s the kind of support you can’t buy.
6. The Secondary Market: A Secret Weapon for Liquidity
This is a topic that doesn’t get enough attention. Most people think of venture capital as a long-term, illiquid asset class. And for the most part, they’re right. But a fund can use the secondary market to provide liquidity for its LPs and its founders.
The secondary market is where investors can buy and sell shares in private companies. It’s a way for early investors and employees to cash out some of their equity before an IPO or acquisition. A fund can use the secondary market to sell a portion of its stake in a few of its later-stage companies. This allows it to return capital to its LPs early, which they love. It also de-risks the investment and allows the fund to double down on its winners.
We’ve also helped our founders sell some of their personal shares on the secondary market. This can be life-changing for a founder who has been grinding for years with little to no salary. It allows them to de-risk their personal financial situation and focus on building the company for the long term.
The secondary market is still a bit of a wild west, but it can be an incredibly powerful tool. It’s a way to create a win-win-win situation for a fund’s LPs, its founders, and the fund itself.
The Future is Syndicated
I'm convinced syndicate investing is the future of venture capital. It's more efficient, transparent, and collaborative. It’s just a better way to build companies.
If you're a founder, look for investors who run syndicates. You’ll get more than just a check; you’ll get a network of champions.
If you're an investor, you should seriously consider joining a syndicate. It’s the best way to get into top-tier deals, diversify your portfolio, and learn from experienced leads.
And if you're thinking about starting your own fund, I can't recommend the syndicate model enough. It's a ton of work, but it can be the most rewarding work in investing.
I hope this behind-the-scenes look was helpful. If you have questions, hit me up on Twitter. I'm always happy to talk shop.
Our Approach to Portfolio Construction
Another question I get all the time is how to think about portfolio construction. A $50M fund can't just spray and pray. It has to be strategic about how it allocates its capital. A common goal is to build a concentrated portfolio of 15-20 companies where the fund has high conviction and can make a real impact.
A fund like that can be divided into two buckets: core and opportunistic. The core investments are the companies the fund believes have the potential to be 100x winners. These are the companies where it leads the round, takes a board seat, and is deeply involved in the day-to-day. About 70% of the fund goes to these core investments.
The other 30% of the fund is for opportunistic investments. These are smaller bets in companies that are a bit earlier or in a space the fund is still learning about. These investments let the fund get a look at a lot of different companies and build relationships with founders it might want to back in a bigger way down the road.
This two-pronged approach gives a fund a good balance of risk and reward. The core investments give it the potential for massive returns, while the opportunistic investments give it a steady stream of new deal flow and learning opportunities. It's a sound strategy, and it's one that I would recommend to any new fund manager.
Frequently Asked Questions
Q:How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
Q:What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 234 startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
Q:Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.