Embracing Emergence Is Partnering With Sydecar 🤝

Sydecar is the go-to platform for emerging VCs to manage both their SPVs and funds. They are on a mission to make private markets more accessible, transparent, and liquid by standardizing how investment vehicles are created and executed. Sydecar’s powerful software allows Emerging Managers to launch SPVs and funds instantly, track funding in realtime, and offer hassle-free opportunities for early liquidity.

Sydecar acts as the silent operating partner to Emerging Managers, handling all back-office functions in a single place. Say goodbye to chasing subscription docs, lost wires, or late K-1s. And for LPs, as an LP myself, I know how important it is to have an easy onboarding process, along with quarterly capital calls and tax docs, all managed by a trusted platform. Sydecar delivers on all fronts, ensuring both managers and investors have the support they need from a platform they can trust.

Click here to reach out to their team via the exclusive link for our community.

Volume #21 TL;DR:

• Investing in Emerging Managers requires a very wide and unique skill set. It is not just science, but it is also not just art. It is a liberal art. And it is a craft.

• The term liberal arts refers to a wide field of study that emphasizes the development of critical thinking, communication, analytical skills, creativity, and morals. All these fields apply to being a good LP.

• Only few GPs do the job extraordinarily well, so finding those GPs is incredibly difficult for Limited Partners.

Table of Contents

• A Few Resources For 2025

• What It Takes To Invest In Emerging Managers

• It takes a Latticework

• How Emerging Managers Can Make The LPs’ Job Easier

A Few Resources For 2025

Legal Counsel For Emerging Managers

If you’re an Emerging Manager and are looking for legal counsel, Chris Harvey is the way to go. He has been an incredible resource to my venture with Embracing Emergence and I can not speak highly enough of the service, insights, and speed he can support you with.

With a specific focus on Emerging Manager, his firm can support GPs with fund formation, LPAs, side letters, GP operating agreements, SEC disclosures, fund deal counsel, etc.

Launching your Fund or SPVs

There is a good reason Embracing Emergence partners with Sydecar - in my opinion, their product, platform solution, pricing model, and user experience, aligns perfectly with what Emerging Managers need. From raising a fund or launching an SPV, Sydecar covers the operational needs for Emerging Managers. For a step by step walkthrough of how their platform works, check out their interactive demo.

An exclusive community for Limited Partners

I host a community for Limited Partners. It’s very straightforward. We all actively invest in EMs. No spam. We exchange reports, articles, intros to GPs, reference checks, etc. It’s free. Respond to this email if you would like to join.

An interactive map of active Limited Partners

I started a map of LPs who are actively investing in Emerging Managers - it’s still growing. It should help EMs be more strategic about connecting with LPs in person. And help LPs connect with their peers face-to-face. You can find it here, or get featured here.

Receive more LP-feedback on your deck

I’m currently working on way to work more closely with Emerging Managers and give them transparent LP-feedback on their pitch deck. As LPs we see 100s of pitch decks, but EMs lack the access to compare their decks to other funds. I hope I can help by giving tangible feedback on structure, language, what slides to add/delete, what is actually compelling and what isn’t. If that sounds interesting, you can already leave me a note by responding to this email.

Books that shaped my approach in VC

• Cicero, On Friendship. A book from 44BC about how and why we build meaningful relationships. VC is a people business and the better the EM/LP can build those, the more it would be helpful for their strategy.

• Pascal, Pensees. A book from 1670 in which one of the greatest thinkers of all time (in my opinion), asks live’s most pressing questions and faces his inner darkness and lights.

• The Rule of St. Benedict. A book from 530 from one of the first monks in the Roman Empire. This is a collection of his thoughts on structuring his monastic community. Relevant for anybody who is interested in the importance of communities in VC.

• Seneca, On The Shortness of Life. A book from the year 49. Realizing that time is our true commodity is what creates the magic to any business venture. We’re finite and only have oh so much time to make it count. This is a book that encourages us to use our days well.

What It Takes To Invest In Emerging Managers

Investing in Emerging Managers is incredibly difficult. Why?

1. The asset class brings a lack of information that makes predicting future outcomes very difficult.

2. The asset class also requires access to opportunities which can only be achieved within years, not months.

3. The asset class requires a wide range of understanding the Venture Capital industry itself, the macro-economics affecting the industry, the industries the specific fund is investing in, the stages the fund is investing in, and the outcome potential of the investment strategy.

4. The asset class requires a unique ability to build meaningful relationships and assess people well. Analyzing spreadsheets is a part of the skill, but it doesn’t entirely get you where you need to be as an LP. You also need a unique ability to pick people.

5. The asset class requires a thoughtful framework of thinking about society, current problems, future problems, and successes that can be achieved in a 7-15 year horizon. That is a long time with a lot of variables and a lot of room to be wrong.

6. The asset class is difficult, because the feedback loop of learnings is incredibly long. The performance of funds can’t be meaningfully assessed until further in their lifecycle. Unless they’re bad, then you might can tell earlier..

7. The asset class is difficult, because there is a lot of noise and not a lot of signal. New funds are constantly forming, but just because a strategy makes sense on paper, doesn’t mean you are looking at a top 10% fund.

8. Did I forget something?

Bottom line: investing in Emerging Managers requires a very wide and unique skill set. It is not just science, but it is also not just art. It is a liberal art. And it is a craft.

It takes a Latticework

Here is a simplified visual of the elements a Limited Partner has to combine in their picking and diligence process when assessing Emerging Managers:

As this visualization hopefully shows: assessing Emerging Managers happens on a wide spectrum of factors and most of these factors play a significant role in analyzing the probability the Emerging Manager brings to produce outlier returns.

I believe most LPs do a great job at assessing the right (blue) side of this overview. This will result in a review of the track record / angel record, their previous working experience, their perception of industry peers, education, etc.

But what we as LPs still have room for improvement in, is assessing the left (green) side. This is less tangible and more difficult to measure, but I believe if you want to be a good LP it’s simply critical. Here your craft of assessing people, their character, their value system of the world and people, their decision-making patterns, their ability to build relationships, etc. comes into play.

How can you be good at the green side? Ask questions that reveal value in hidden places.

Those questions will have to be sown across a wide surface in order to be able to cover the different factors that help the LP discern a top 10% GP from an average GP.

And the variety of questions that need to be asked is what makes the job of the Limited Partner a Liberal Art and a craft.

The term liberal arts refers to a wide field of study that emphasizes the development of critical thinking, communication, analytical skills, creativity, and morals. All these fields and especially the combination of these fields apply to being a good LP.

Charlie Munger underlines this point with his mental model of the latticework. He argues that consciously developing and applying a Latticework of Mental Models will empower you to see each problem through a variety of lenses and possible options. It's the difference between solving problems with a single hammer, versus solving them with a dynamic and expansive cognitive toolkit. 

The point of the latticework is that your ability to cross different insights, frameworks, and intellectual disciplines and the ability to apply them all to a certain problem or thought process, will increase our probability of making good decisions.

And since the Liberal Arts by nature cover various fundamental disciplines, they are the perfect foundation to build a latticework on.

And since assessing Emerging Managers requires such a wide spectrum of factors that include psychology, finance, creative elements, anthropology, history, etc. - building a latticework might need to be more than just an option, but a necessity.

How Emerging Managers Can Make The LPs’ Job Easier

Simply put: what makes the job of the LP so hard is that the job of the GP is so hard. Only few GPs do the job extraordinarily well, so, finding those GPs is incredibly difficult for Limited Partners.

The best place to start in respect to how Emerging Managers can make the LPs’ job easier (not that this the job of the Emerging Manager, but there is clear incentive to do so…), is with how to pitch the fund.

I think many Emerging Managers lack access to direct LP-feedback on their pitch. Many LPs review hundreds of pitch decks, and at some point, 90% of the pitch decks start to look the same. What many believe is a slide that communicates unique value or differentiation starts to be just another slide that most Emerging Managers also have in their pitch deck.

Besides refining the pitch deck, I have seen an opportunity in Emerging Managers communicating their fund name in a more clear way. Why particularly the fund name? Because typically the name of a business communicates something about the story of the business, who they serve, how they serve their clients, and why somebody should work with them.

I wrote a longer piece on this last year.

I know I am not revealing new truths, but I promise, these simple refinements will be prove to be a powerful way of communicating with LPs and helping them discern the GPs’ differentiation.