Episode 35 - Nik Talreja
In this episode, I sit down with Nik Talreja, CEO and founder at Sydecar.
Guests
Show notes
In this episode, I sit down with Nik Talreja, CEO and founder at Sydecar.
Nik doesn’t come from the usual bankers/financial institution background. He started as a lawyer in New York, working at firms like Olshan Frome Wolosky and Weil Gotshal and Manges. He discovered startup pretty quickly, working with founders on term sheet and funding round, so he decided to move to Palo Alto.
In California he started working at Cooley as a lawyer again, but the entrepreneurial vocation was too strong. He joined Talis partner as a co-founder, where he wanted to use his experience as a lawyer first hand, managing his studio, then to Spiral Therapeutics, changing industry entirely, as director of finance operations.
Finally, he founded Sydecar, coming from years of experience in angel investments and rounds in startups. Sydecar makes it simple and efficient for venture fund and syndicate managers to form Special Purpose Vehicles (SPVs) and funds by automating banking, compliance, contracts and reporting. Founded in 2021, Sydecar is on a mission to build the infrastructure that powers private markets.
With him, we will talk about the two faces of the US startup ecosystem, comparing Silicon Valley to New York, but also his business angel experience, the set up of startup in Texas and his experience raising funds for startups and VC.
In this episode
Nik Talreja explains how years as a corporate lawyer at Cooley and backing his founder clients led him to co-found Sidecar, which automates SPVs and funds for venture investors. He advises emerging managers to test their thesis with SPVs before raising a fund, explains why fund sizes are splitting into micro and mega, and why raising a fund is far harder than raising for a startup. He also describes where AI helps and where Sidecar deliberately avoids it.
Chapters
- 0:00Introduction and Sidecar
- 3:21From corporate law to investing
- 6:51The pain of setting up SPVs and funds
- 10:51Advice for emerging managers
- 14:38Paths into venture capital
- 21:00Delaware and cross-border deals
- 24:23Micro funds vs mega funds
- 28:00Where AI helps and where it doesn't
- 32:00Raising for a fund vs a startup
- 35:20Silicon Valley vs New York
- 38:15AI and the legal profession
- 42:39Advice: enjoy the journey
Key facts
Nik was a corporate lawyer in New York and at Cooley in the Bay Area, then started his own firm working with about 30 founders.
Nik co-founded Sidecar in early 2021; it automates the creation of SPVs and turnkey funds for venture investors.
Sidecar has worked with thousands of sponsors and moved more than $3 billion through its product.
Sidecar only forms vehicles in Delaware, and about 25% of its business comes from GPs and deals outside the US.
Sidecar does not use AI to create vehicles, to keep legal and economic relationships fully deterministic, but uses it for support, investor outreach and reporting.
Would-be fund managers should build a track record with SPVs before raising a fund.
Fund sizes are splitting into micro and mega funds, because institutional LPs prefer the safety of large, established funds.
Raising a fund is an order of magnitude harder than raising for a startup.
Raise capital when you don't need it: terms are better and investors want you more.
Silicon Valley still favours experimentation, while New York wants practical applications.
AI could remove much of the routine work of junior lawyers, but that may leave no one trained to replace senior staff.
Questions and answers
What should emerging managers ask themselves first?
Why they want to start a fund, removing any vanity, and whether they have the relentlessness to hear no hundreds of times.
What is the hardest part of running SPVs?
The bureaucracy of forming vehicles, opening accounts, chasing signatures and wires, and years of tax and reporting.
What is Nik's advice to founders and VCs?
Pause and enjoy the journey rather than only chasing the result.