Why we're shutting down the public syndicate

I'm calling it now. I believe we will see multiple billion-dollar outcomes from just the companies at our event last week in Oakland.

One of our LPs at the event said it best, “The sheer concentration of high quality deals is unlike anything I’ve seen.”

We've gotten so good at picking founders and investors that companies are now closing their entire round in the room. This is amazing for our fund, but it means we can't do SPVs on the best deals. There just isn't enough allocation to go around.

I imagine you’re thinking, “Noooo! Josh, don’t kill the syndicate. SPVs are the best!”

I agree! SPVs are the best.

And it made so much sense when we first started the fund: let listeners pick which investments to make alongside the VCs on the show. And it worked out great! We hosted syndicates for Tether, Dotcal, Modern Picnic, Gemist & Nectir.

But then something changed.

A new era at The Pitch

Last week we recorded pitches from our summer cohort. Out of twenty-one founders who presented, fifteen got a commitment in the room. In about half of those deals, at least one VC wanted to lead/take the entire round.

We had to negotiate just to get allocation for our fund. But because we made the connection, the founders and VCs were happy to make room for The Pitch Fund! But they weren’t sure about the syndicate.

When these pitches turn into episodes in the fall, the allocation for the best deals will already have been claimed by the VCs (and perhaps some of our LPs who joined us at the live recording).

Investing with conviction

Something I noticed while watching Cyan Banister, Charles Hudson, Elizabeth Yin, Mac Conwell, Ben Taft and Jesse Middleton take pitches for three days straight last week: when the best VCs have conviction about a founder/company, they try to take the whole round.

We saw this happen several times last week, a founder came in with either no money raised or without a lead investor, but within forty-five minutes they had their round completed and multiple VCs trying to secure as much of the round as possible for their fund.

It was crazy to watch market dynamics play out live in front of me!

On one pitch, two VCs in the room wanted to lead, so they floated the idea of working together to co-lead the round which by then had gotten so big the founder hinted at a new round with a higher valuation. But just then Elizabeth Yin swooped in with a smaller check size to try to fill the existing round and force the two competing VCs to price a new round.

It was wild!

But I can’t tell you how incredibly validating it is to watch a founder crush their pitch at one of our recording events. So much goes into the founder selection process behind the scenes, not just the vetting process we run, but also the individual coaching I do to help each founder craft the best version of their pitch.

So when a founder successfully raises in the room, I actually feel some ownership in the outcome.

We kicked off the Oakland pitch event last Tuesday with three successful pitches in a row. Three founders, six checks.

Sitting just off camera in my director’s chair, I was gleaming. Gloating perhaps! The reasons VCs chose to invest in each founder, were exactly the ones we identified in our process before the show.

As a founder-turned-podcaster-turned-fund-manager, making decisions in a vacuum just isn’t in the cards. But I wouldn’t have it any other way! I love being able to test my assumptions in front of VCs I respect, and then hearing feedback from our audience when episodes air.

But I’ve been doing this long enough to recognize that we’re at a critical inflection point. Now is the time to double down.

To take full advantage of the investment opportunities at hand we’ve decided to increase our fund size to $7.5 million and double our check sizes for the remainder of fund 1.

When you hear season 12, you'll understand why.

Over the next few months we will deploy between $1.2 and 1.8M in the deals that pass final diligence.

Final capital call on December 15th

We’re hosting our final capital call for fund 1 in Q4, we have 18 companies in the portfolio now and we’ll hit 30 by end of year.

To our existing LPs in the fund, thank you for believing in us before anyone else! If you’d like to increase your investment in fund 1, you still can. And I’m happy to share more about the companies we have coming up.

To our syndicate members, thank you for backing our companies and supporting our show! I hope you’ll stay tuned because the companies on next season are some of the best I’ve ever seen.

If you’d like to learn more, read our fund 1 memo or hit reply if you’d like to connect.