I frequently have founders reach out pitching their startups for investment that don’t fit our/my investment criteria. While I feel bad having to tell so many founders no, I have found that having a well defined thesis and focus simplifies things.
This saves time for both investors and founders, allowing both to avoid unneccessary and unproductive back-and-forths which can seriously hamper a startup’s ability to execute (and fundraise).
So if you are a founder looking for investment from The Syndicate, please see that you fit the criteria.
The Syndicate Thesis
We invest in strong founding teams building disruptive, early stage businesses that solve big (expensive) problems in the world. We focus on large, winner take all (or most) markets and invest in startups with true innovation that are building businesses with defensible network effects.
Stage: typically pre-Series A, although we will exercise pro rata
Industries: ecommerce/marketplaces, AI/automation/robotics, fintech/blockchain, B2B SaaS, AdTech/MarkTech, IoT (only with SaaS model) and network effects businesses.
Geographic Focus: we prefer North America and Europe but we do not limit our investments when the right team and product and market collide.
Why I Invested
Here some portfolio companies, with basic reasons why I chose to invest — unfortunately a more detailed analysis is not possible due to the confidential nature.
Picks & Shovels Co.
I am primarily betting on team and market here. Picks & Shovels founder Matt Galligan is serial entrepreneur with 3 multi-million dollar exits under his belt and experience building and growing strong teams. Through an introduction from Tyler Willis (an angel investor and syndicate lead I greatly trust), I got to know Matt and was impressed by him and his vision.
The company is focused on creating the future of cryptocurrency, building the tools investors need to manage their portfolios and succeed in crypto investment. I am very bullish on blockchain in the long run and see the market as a massive opportunity (already a $600B+ market cap and growing quickly). As the industry grows, so will demand. And currently the tools and piping to manage crypto assets is archaic and in need of major work and product focus (a specialty of Matt’s).
Whether this will be a winner take all (or most) market, where the vast majority of returns accrues to the top dog remains to be seen, but a rising tide lifts all ships and Matt Galligan is one hell of an experienced captain.
Kush Tourism
I am betting on a strong team, great traction and an booming market here. Kush Tourism is a cannabis content company with strong revenues that is building an industry defining B2B marketplace.
After an introduction from jason Calacanis and seeing progress from the company during Jason’s Launch Incubator, it is hard not to bet on this business. The founders are all driven hustlers, with professional and competitive sports backgrounds and experience pushing the limits. And the connections thanks to Jason have rapidly accelerated the progress of the business.
But best of all, the cannabis industry is exploding in the US, as more and more states legalize marijuana ($7.2B in legal sales in 2016 and growing 17% YoY). As a recognized industry with connections to top players in the space and a transparent, high demand business model, Kush is building a defensible B2B business with strong network effects — both areas I specialize in and can help the company with.
OpenFan
Incredible company, impressive founders, huge conviction. I met OpenFan’s founders through Jason Calacanis and through seeing their progress in the Launch Incubator, was already excited about the company. OpenFan gives all brands Amazon-level customer intelligence and targeting by selling entire historical purchase data to businesses on their customers.
Now Apple can see customers that bought iPhones also bought an Amazon Echo, a pair of Air Jordans, two tickets to Ludacris and the latest Harry Potter book, all in the last week..
The targeting and technology behind OpenFan are unmatched, creating perfect customer data sets for advertising and destroying Amazon’s data advantage in understanding your customer.
As a 7 figure Amazon seller (before selling the business), I understand the challenges of owning customer data for marketplace sellers and see OpenFan as leveling the playing field and beating ANY targeting or retargeting system out there for customer analytics and advertising. I will work with team to nail the Amazon side of sales and marketing.
Facebook or Google will NEED to buy this company to compete. And both founders bring dynamic strengths to the table with strong marketing, branding and product experience in past successful startups.
Public Goods
I invested in Public Goods because I believe their alternative ecommerce model provides a strong, defensible barrier against Amazon.
Public Goods is the Costco of online sales, offering luxury consumer products at cost with a monthly subscription model. After raising $686k via Kickstarter, the company joined 500 Startups to grow and scale. 500’s growth focus and extensive network puts the company in a phenomenal position to scale, and giving strong unit economics and recurring subscription revenue, Public Goods has a pretty strong model.
Because of the direct to consumer, subscription nature of the business and control of the supply chain, PG can drastically reduce costs while preserving luxury quality for consumers. Amazon and virtually all other ecommerce companies cannot do this, creating the perfect niche. And with rapidly growing health food and organic markets, Public Goods is prime to democratize access to healthy products while building a massive, profitable business.
I heard about the company from Tyler Willis his support in addition to several notable investors added strong credibility to the deal. And of course I can help the company and evaluate market thanks to my ecommerce experience.
Acre Designs
I invested in Acre Design due to changing market conditions in the housing economy and a growing number of cities (and states) mandating all new homes pass Net Zero Emission regulations. With the growing emissions problem and escalating population, demand for NZE housing will quickly grow. Acre Designs is an eco-friendly building design company that helps builders quickly (75% faster), cost-effectively (⅓ of labor cost) to create low emission housing, mass produceable.
Acre went through Y Combinator, have developed software/UI IP, own no real estate or construction materials and have a high margin, highly scalable construction tech company.
Acre has managed to pre-sell many homes to date without any marketing. And the founding team were very strong during discussions and have a extended track record in construction, management and design.
CityFALCON
I invested in CityFALCON because personalization is the future and their financial news services product is lightyears ahead of the competition. CityFALCON provides Bloomberg Terminal-like quality information with a specialized focus on the stocks, assets, cryptocurrencies, regions and industries a trader focused on — where 15£ billion are spent annually. After signing BNP Paribas, one of the largest international banks to service their entire wealth advisory division, it was clear the company had an enterprise quality product and sales experience. And upon speaking with the founder Ruzbeh Bacha, it was clear he had experience building and leading financial services team and had managed to recruit a strong team while keeping burn rates incredibly low. Between the ability to provide Joe Schmo with Warren Buffett esque quality, a simple web, app or Alexa voice interface and enterprise level functionality it is clear CityFALCON has the potential to disrupt financial services.
For Investors
Investing for Profit
Unlike many angel groups, The Syndicate focus on returns for our investors. Every deal we consider has homerun potential to allow power law dynamics to create favorable returns. And in every startup, we believe a moat is critical, especially network effects where applicable.
We both evaluate startups based on these criteria and also help portfolio companies plan and take advantage of these to build scalable, sustainable businesses.
How it Works
We use a syndicate model with a $1K minimum investment (all deals are optional). I invest personally in each deal, and I bring all my deals to the group. There is no membership fee or management fee to participate. There is only the standard 20% carry on returns.
The Syndicate seeks a $75k — 150K investment allocation per deal. Investments are opt-in deal by deal.
Apply now to join the The Syndicate and invest alongside us in promising early stage deals.
NOTE: You must be an accredited investor or represent a trust or investment firm to qualify. The accredited investor definition is locally defined. In the US, represents $1M in net worth (excluding primary residence) or $200k/yr in income for a minimum of 2 years.
Notable Coinvestors
Before you go…
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