Embracing Fund+ with Sydecar - A Mini-Series on setting up your fund
Setting up your fund, fund legal docs, managing compliance, KYC, LP-onboarding, capital calls, and tax documents is not sexy. And having a solid backend and fund admin is nothing that differentiates you. However, having a bad set-up is something that differentiates you… towards the negative.
With Sydecar’s Fund+ product Emerging Managers get end-to-end fund formation and fund administration. I did a demo of the product myself, both from the perspective of a GP and LP and was impressed.
Being an Emerging Manager that is looking to take the next step in getting “institutional-ready” can be overwhelming. There are countless elements to think through: legal set-up, bank accounts, tax documentation, KYC for LPs, LP reporting, etc. All while your management fee needs to pay your bills.
Sydecar’s Fund+ handles all of the operations for you. Check out the Fund+ offering and the self-guided demo. It combines the stability of a committed capital fund with the flexibility of deal-by-deal investing while being the most cost effective option!
Volume #32 TL;DR:
This is not a brand-building exercise. It’s not even a fundraising exercise. It is an exercise for the Emerging Manager to truly refine their strategy, to be laser-focused on what they are uniquely gifted it.
Table of Contents
The Limits Of Our Language Are The Limits Of Our LP Relationships
One of the returning themes of Embracing Emergence is “language”. Language can make or break your fund strategy, fundraising, and brand. It’s foundational to how we think and how we communicate what we are doing.
Language is the outward manifestation of our inner world. It reflects how we think, how deeply we think, what we think about, and how well we are able to communicate to whomever is in front of us.
Not all language is equal. Not all language is equally concise, compelling, or insightful.
Whenever Emerging Managers reach out to me for feedback on their fund strategy, pitch deck, positioning to Limited Partners, or any other aspect of their fund that relates to communicating their value to LPs, the concept of linguistic consistency is a recurring theme that keeps coming up.
From reviewing countless pitch decks, which oftentimes represents the essence of how an Emerging Manager would represent their fund to other LPs, or how the Emerging Manager perceives their unique offering and strategy, I notice that very few use consistent language around their fund - even across 12-18 slides.
Before I dive into why linguistic consistency matters, I want to let a few quotes by philosophers and writers I have read over the years speak about the importance of language:
[M]y discovering my own identity doesn't mean that I work it out in isolation, but that I negotiate it through dialogue, partly overt, partly internal, with others.
Language is not just a medium we use to describe an independent world. It’s the condition of our access to the world—it shapes what we see, feel, and respond to. It enables the formation of moral frameworks, historical consciousness, and collective identity.
The most striking aspect of linguistic competence is what we may call the ‘creativity of language’, that is, the speaker’s ability to produce new sentences, sentences that are immediately UNDERSTOOD by other speakers although they bear no physical resemblance to sentences which are ‘familiar’.
A language is not just words. It’s a culture, a tradition, a unification of a community, a whole history that creates what a community is. It’s all embodied in a language.
The limits of my language mean the limits of my world.
The point is, language manifests our meaning and our connection with each other. It is a bridge between humans. Between our human experience.
And to rephrase Wittgensteins’s quote: The limits of my language mean the limits of partnering with LPs.
The Concept of “Linguistic Consistency”
The fellowship of the Lord Of The Rings. This fellowship might be one of the greatest set of advisors to Emerging Managers I am aware of. I will explain.
Over the last years I have refined my concept linguistic consistency around Emerging Managers.
It initially started with me coming off of calls with GPs and remembering something distinctive about what they had said or something they described their fund strategy with. It was just something they said that stuck with me.
This sense of language stuck with me and has ultimately resulted in the following concept:
There are a few fund managers who have managed to build a language around their fund that they are now associated with. Daniel Kimerling, who writes about being “orthodox / unorthodox”, or Erica Wenger, who writes about backing “Elephants vs Unicorns”.
But also the Tier-1 firms have mastered the language around their fund vehicles. The name “American Dynamism” is just one example. You immediatly can imagine what the thesis of this fund strategy is. You can use this name in IC. And the materials and writings that a16z is using around “American Dynamism” are all building a cohesive language construct around this strategy.
The Lord of The Rings is arguable the greatest trilogy ever written in the English language. Any person who has ever read the books or watched the movies will have been able to observe something - sometimes subconsciously: the linguistic consistency of the world Tolkien built.
The names of the characters, the names of places, the language of the elves - it all forms one linguistically consistent world. The reader / viewer is able to enter this world, breathe the air the hobbits and dwarves are breathing, and join the fellowship on their journey as one of them.
So, linguistic consistency sparks imagination.
How does this apply to Emerging Managers?
Well, the language you develop around your fund is what invites the Limited Partner into your world. Erica Wenger backs Elephant-type founders, because they are communal animals, their ears are bigger than their mouths, etc.
It tells me a few things explicitly and a lot of things implicitly. I now can start imaging what one of her meetings with a founder in New York is like. Questions she will be asking. Insights she is looking for. The type of people she backs.
Look, this is not a brand-building exercise. It’s not even a fundraising exercise. It is an exercise for the Emerging Manager to truly refine their strategy, to be laser-focused on what they are uniquely gifted it.
Where To Start Developing Your Language
So, where should you start developing this linguistic consistency. The short answer, it depends with where you are at with your fund.
If you are actively fundraising or about to go out, your pitch deck might be a good place to start. Does your thesis keep tying into a majority of your slides. Do you keep highlighting certain aspects of your thesis with your language.
Some GPs pitch their thesis / vision / unique value, whatever you want to call it on their second slide and then never mention it again. That’s a wasted opportunity. The point of your pitch is to enable the LP to make the most educated decision possible. May of the LPs you are speaking with will have to go over your fund in IC - don’t you want to equip them with the most compelling language you have to offer?
If you are actively deploying and not fundraising, I would suggest to find time to reflect - as difficult as this sounds. Find patterns in how you have been talking about your fund. Think about what language helped you to speak about your thesis in the most transparent, true, and compelling way. For that, you need to think. It’s okay to take some time for “unproductive” thinking.
Again, there is no recipe to this. The only recipe I can give is that I have seen consistent language be a powerful tool for Emerging Managers.