Collaborate and the rest will follow
People like to feel very clever when they say things like “show me the incentives, and I’ll show you the outcome” or just simply that “incentives matter.” But in a venture career, recognizing the incentives is the hard part.
The obvious incentives, and especially carry, are the most emphasized levers for how venture firms run their businesses and manage their teams (of non-GP investors). If the firm makes money, we all make money. Incentives aligned. Job done. Wrong.
Carry isn’t enough to align incentives with your GPs when you know you’re not going to vest all of it and your real payday is at your next job (internally or via promotion). The most common (and wrong) way people think about this in terms of needing to ship capital out the door.1 That response is wrong but the impulse is right. You’re doing deals to get your next shot.
If you’re not a GP, you should be thinking about that dynamic and your real incentives early and often. So of course you need to do good deals, but whom you do them with and how matters just as much. Taking a collaborative, syndicate-oriented approach is the easiest way to set yourself up for success beyond the role you have today.
Collaboration gives you distinct advantages when you’re not the GP:
You need references. No one can really reference you in a meaningful way until/unless they’ve actually invested with you so bring them into your deals.
You need a new/next job. Bringing people co-investment or follow-on opportunities is the easiest way to generate top of funnel job opportunities. Your next job should come from/at one of your prior co-investors.
You need to get deals done to have experience, founder references, and a track record.2 Bringing in strong co-investors/follow-on checks/a co-lead will help you get deals done within your fund. If you’re not a true check writer, you need validation and CYA for your GPs. A reputable syndicate gives you that.
Fortunately for me (and for you) Slow is dispositionally very collaborative and syndicate-oriented! We target ≈10% vs other firms who look for >15% precisely so we can work more closely with other seed funds. But you’ve probably been encouraged to guard your ownership more than that or at the very least have let your partners drive the thinking about syndication and follow-on. That might be in their best interest but it is definitely not in yours.
You need to build a rep and get reps in; co-leading and taking an open stance to co-investors and the wider market is the best way to do that.
You can see that in how insecure principals and small p partners spent the last two years pushing pace and pricing out of anxiety to develop a marketable track record.
Track record will be in a soft sense, not contractual.