Ankit is Cofounder and CEO of A2D Ventures, whose mission is to build Southeast Asia's largest angel investing platform where visionary investors get access to co-invest and back tomorrow's game-changing startup founders.
Ankit has also held a leadership role in Shopee and is ex-McKinsey.
Guest Author: Ankit Upadhyay
Alex Pattis has raised over $60 million and invested in over 275 startups.
But the thing is.. Alex is not a VC.
In fact he still hasn’t even quit his full-time job at a company called Hampton.
This is his story of creating one of the most popular angel syndicates in the world.
Who is Alex Pattis?
Alex started out at an early stage startup based in New York that had a successful exit and decided he wanted to diversify his net worth.
So in 2017 he entered the syndicate world by joining Jason Calacanis’s syndicate. Jason is probably one of the best known individuals in this space.
Through making some investments in that syndicate Alex got to meet founders and VC’s and started to learn the game.
Then when he felt confident he started his own syndicate called Riverside Ventures.
So what is a syndicate?
A syndicate is like a special club for investing. In a way it democratizes investing in startups and gives individuals access to deals that typically VC’s only have access to.
For example for as little as $1000 you can invest in a unicorn as part of a syndicate.
Now.. why would you want to invest in these startups? I mean…they are very risky right?
Yes… they are indeed very risky. But if they do well you can potentially get a return of 50x, 100x, or even 250x.
But can you just invest in the startup directly?
Well typically there is a minimum required investment of $100k or more. And the folks that invest in a syndicate often do not have the capital to invest that much.
So instead if you invest just say $1k and the syndicate puts in $100k… then you have 1% of the syndicate’s share.
Later in some years if there is an exit for say $1 billion than you would get a share. For example perhaps by then the syndicate’s stake is a 2% stake, or $20 million.
Then your stake would be worth 1% of that, or $200k. And therefore you would have gotten a 200x return on your $1k investment.
Not a bad return.
How do syndicates work?
Basically the person managing the syndicate gets capital allocations to startups.
How does he do that? Well through various means.
But a lot of it is through developing relationships. Relationships with founders, VC’s, other syndicates, etc.
The person running the syndicate has two main functions:
1) They need to source deal flow
2) They need to put together investors (capital)
What do they get for all this work? They earn a percent of profit from the returns called ‘carry’.
Alex, for example, gets 20% carry which means that if his fund makes $1 million in gains for their investors… then he would earn 20% of it (or $200k).
Now for my plug of A2D Ventures
I am Ankit Upadhyay, Founder/CEO of A2D Ventures, which is one of the first productized angel syndicate as a platform in SE Asia. We source some of the best deals, co-investing with VC firms from around the region and have already made a number of investments across Thailand, Indonesia, Philippines, and Singapore.
Our vision is to bring the same type of syndicate success that has occurred in the US to SE Asia. And if we do that… it will be great not just for our investors but also for the startup ecosystem here.
If you’re interested in investing with us… please check out our site at www.a2dventures.com.
