How a lawyer-founded venture capital startup wants to take on AngelList and Carta

How a lawyer-founded venture capital startup wants to take on AngelList and Carta

  • Sydecar, a business execution platform for venture capital investors, has just raised $8.3 million in seed funding.
  • The startup was founded by two Big Law lawyers who also started their own venture funds.
  • The company is trying to compete with market leaders through standardization and legal expertise.

Sydecar, a new business execution platform for venture capital investors, has just announced an initial $8.3 million round to help it face the competition.

Sydecar, which handles administrative tasks for emerging venture capitalists, was founded in 2021 by two former tech lawyers who left their jobs at Big Law to start a venture capital firm.

“When we started our fund, it was very, very difficult for us to get off the ground. It was slow and painful to work with other service providers,” said Nik Talreja, co-founder and CEO of Sydecar. “So we decided to try to reinvent how the enterprise operates for emerging managers.”

Sydecar helps investors save time and money by automating banking, compliance, contracting and reporting processes, Talreja said.

The startup is entering an already crowded market of platforms that help VC investors raise funds and invest capital. Talreja said his background as a lawyer and Sydecar’s “product-oriented approach” would allow the startup to take on market leaders such as AngelList and Carta.

The seed round was led by Deciens Capital, with participation from Pipeline Capital Partners, Anthemis Group and Hustle Fund VC. The list of angel investors includes Mike Vaughan, former chief operating officer at Venmo; Rohini Pandhi, Square’s product lead; Daniel Khan, leader of open finance at Plaid; and Nik Milanović, General Partner of The Fintech Fund.

Using a legal lens to identify market opportunities

Talreja said he and his co-founder, David Meister, have firsthand knowledge of what emerging fund managers need. Both represented startups and venture capital at elite companies, including Cooley, Weil Gotshal and Sullivan & Cromwell.

The VC platform market is still “pretty nascent” and existing solutions don’t “anticipate or react to what customers really want today, which is efficiency, frictionless transaction, more focus on relationships and information sharing, and ultimately ,


liquidity

“, Talreja said.

“There’s not a lot of homogeneity because each deal is still negotiated so specifically, but that might not make sense,” he continued.

Sydecar wants to create a standardized process for emerging investors to raise funds and invest capital, from opening bank accounts to generating signature agreements. Legal forms ultimately drive all transactions and endeavors, and Talreja and Meister say they can use their legal expertise to create tools to automate those forms and processes.

This strategy differs from traditional VC platforms, which typically rely on large operations teams to handle banking, compliance, tax and regulatory filings, Talreja said. Sydecar instead lets investors control the process more and complete tasks at a faster pace, he added.

Target customer base and growth visions

Sydecar’s main clients are new fund managers and angel investors who are interested in exploring the world of venture capital. “They don’t want complexity. They don’t want to trade in LPs,” Talreja said.

The alternative investment industry, which includes venture capital, is expected to reach $14 trillion by 2023, data tracker Preqin has indicated.

So far, Sydecar has helped thousands of investors close more than $350 million in deals, the company said.

It plans to use the seed capital to hire an additional 30 to 40 employees across its product, engineering, customer experience, marketing and operations teams. Talreja said it also intends to expand its partnerships with enterprise companies to enable API integrations and launch more business.

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