🔥The Rise of Alumni Syndicates 🔥

a newsletter about VC syndicates

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Alex Pattis & Zachary Ginsburg
October 11, 2023

🔥The Rise of Alumni Syndicates 🔥

This week we are very excited to go deep on alumni syndicates and highlight the many aspects of why they have become so popular and helpful to founders and investors over the years.

We are also excited to have teamed up and co-author this post with Amr Alshihabi - GP at Karman Ventures (who manages the Uber Alumni Syndicate).

In this post, we will cover the following:

  • What is an alumni syndicate?

  • Why do alumni syndicates have an amazing sourcing flywheel?

  • Why are they helpful to founders?

  • Why are they of interest to alumni?

  • Which alumni syndicates exist?

Let’s jump into it!

What is an alumni syndicate?

An alumni syndicate is a type of investment group or network composed of individuals who share a common educational or professional background (i.e. worked at Uber or attended Stanford Business School). These individuals, referred to as “alumni”, come together to pool personal capital (as angels) and collectively invest in startups.

In other words, an alumni syndicate operates quite similarly to other syndicates like Calm Ventures & Riverside Ventures. However, alumni syndicates are more exclusive on who can be an LP and members share a common bond or experiences together.

For this reason, there is typically a much stronger bond across the syndicate and also a strapping desire to support the next wave of founders from the company or university relative to the syndicate.

But, do the companies' alumni have capital to deploy?

According to Forbes, it is estimated that 6,000+ Millionaires were created via IPOs for Uber, Lyft, Palantir, Airbnb, Slack, Postmates, and Pinterest.

So, yes, there is plenty of capital to be deployed across employees in these alumni syndicates.

Not yet sold on why alumni syndicates are powerful?

Here’s what the ex-Uber syndicate leads have to say:

“Uber built teams all over the world to solve the challenges that came with hyper-growth. We believe that the people who build the world’s most impactful companies learn unique skills and form deep connections with their teammates. Our active community of investors sources opportunities and provides support for ambitious founders and early teams along the way.”

And now from the ex-Airbnb syndicate leads:

“Airbnb brought together talented and ambitious people from around the globe who built and scaled a special company. Now, in the spirit of being good hosts, we, along with investors in our syndicate, support ambitious new entrepreneurs as they embrace new adventures. Due to our network and reach, we are fortunate enough to work with many of these founders from day one.”

Why do alumni syndicates have an amazing sourcing flywheel?

Success in venture is an expression of networks. The people who build transformational companies will help build the next generation of transformational companies.

Imagine being an early employee at a generational company like Uber or Airbnb. Over time, you build a network of A+ tech talent, and your career accelerates. You're then sought after for senior roles at the hottest companies, and your network's value compounds as your career progresses.

Alumni syndicates are packed with these types of people - successful technology insiders. These insiders are “in flow” and simply know people starting companies. Referrals from syndicate members comprise a huge portion of the alumni syndicate’s deal flow. Also, a large percentage of investments are into companies founded by those alumni.

This ecosystem generates a flywheel of high quality deal flow that is often unparalleled.

Why are alumni syndicates helpful to founders?

Alumni syndicates have proven track records connecting founders with talent, advisors, customers, and lead investors.

“Alumni syndicates allow a founder to get access to a broad base of investor support, conveniently wrapped up in one cap table entry.”

-Luba Lesiva, Founding Partner at Palumni Ventures (Palantir Alumni Syndicate & Fund)

The people who build transformational companies know what success looks like. After experiencing building something special, they have the entrepreneurial drive to join and build the next great company. Alumni syndicates are an excellent recruiting channel for founders.

“Since investing, the ex Uber syndicate introduced us to several highly qualified technical and business talent from their network – including a founding exec hire we made.”

- Ellen DaSilva, Founder of Summer Health (backed by Sequoia, Lux)

From a B2B customer introduction and biz dev standpoint, the diaspora of talent hubs often extends widely throughout the Silicon Valley ecosystem. Leaders from these companies are easy introductions for portfolio companies.

“The ex Uber syndicate has continuously been among the most helpful of our investors. They’ve introduced us to several potential customers, and have introduced us to executives we’ve hired. They are kind of like that cool uncle that never bothers you unless you need their help.”

- Michael Vega-Sanz, Founder of LULA (backed by Founders Fund, Khosla, Bill Ackman)

In terms of connecting with lead investors, many prominent VCs want access to these ecosystems and frequently turn to alumni networks for dealflow. Alumni syndicates rarely lead rounds and offer flexible check sizes, allowing them to work with a wide range of lead VCs. Notably, alumni from companies like Uber, Airbnb, and others also hold GP positions at top-tier VC firms, which makes those introductions even easier.

For example, Uber alumni alone hold check writing positions at known VC firms like a16z, Accel, NEA, Kleiner, Craft, GV, Benchmark, Addition, CRV, Greycroft, Greylock, Redpoint, and more.

“When Fonoa was first getting started, the ex Uber syndicate introduced us to our Seed round lead investor (Index). They consistently offer to make introductions to new high value customers, tap into their network to back channel with candidates, investors and decision makers.”

- Davor Tremac, Founder of Fonoa (backed by Coatue, OMERS, Index)

Why are alumni syndicates of interest to alumni?

Experiences at game changing companies often draw people together to build lasting relationships throughout their careers.

Joining an alumni syndicate means becoming part of an exclusive network with former A+ colleagues. It's a chance to contribute to the startup ecosystem by sourcing deals, investing in companies, and supporting founders. Additionally, it offers the opportunity to support friends and former colleagues who are starting companies.

Being part of an alumni syndicate also gives alumni access to the venture capital asset class and allows them to gain valuable investment experience, especially for those aspiring to a career in the venture industry.

“Most alumni syndicate LPs miss working at early-stage startups and angel investing through alumni syndicates brings us closer to them. Most LPs don't have the access to identifying early stage startups so this gives them access they wouldn't have otherwise.”

- Brian Nichols (Ex-Lyft), Uplyft Syndicate Lead & Angel Squad Co-founder

"The alumni syndicate's LP base gets value because of the access to other alumni doing interesting, complimentary or similar things that delivers value across the syndicate's portfolio."

- Jason Shafton (Ex-Google), Founder & CEO of Winston Francois, a growth consulting firm.

In Summary…

Here is why we think Alumni Syndicates add tons of value to the VC/founder ecosystem:

  1. Connection: these syndicates are composed of those who share a common experience (and a winning experience) which creates connection and allows for a fun and high financial upside opportunity to connect and support the next wave of founders. Syndicates act somewhat similar to an investment club that allows alumni to strategically invest and explore investment opportunities on a deal-by-deal basis.

  2. Networking: there is no shortage of networking opportunities that arise with other like-minded individuals within an alumni syndicate. The syndicate can serve as a valuable platform for sharing deal flow, insights, experiences, advisory opportunities, and new role discovery/recruiting.

  3. Unique Deal Flow: we’ve stated this above already, but it’s no surprise that alumni from Uber, Airbnb, Google etc. have built relationships from their days at those companies and can uncover some of the most talented founders, and early! This is one of the primary reasons these alumni syndicates were started.

  4. Financial Upside: Many of these employees significantly grew their net work upon previous IPO’s. Early-stage investing provides a nice way to diversify capital and, well, try to back the next Uber at seed!! Who knows, maybe these alumni syndicates already have :)

Here are some of the awesome alumni syndicates on our radar:  

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We’ll be back in your inbox next Wednesday on our next topic. Thanks for tuning in!

Questions? Comments? Feedback? We welcome all, and would love to hear from you!

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✍️ Written by Zachary and AlexÂ