Deep Dive: Rise of the Solo GP

Max Fleitmann
Founder of VC Stack
Deep Dive: Rise of the Solo GP
Uma Patel
VC Content Creator

This deep dive was initially published in our VC Stack newsletter. Make sure to subscribe here to not miss any future episodes.

Solo GP vs. Angel Investor

Nikhil Basu Trivedi initially coined the term solo capitalist, in 2020, as an individual who is the sole GP of their fund, the only member of the investment team, whose personal brand is the brand of the fund, raises $50M+, and who is competing with traditional VC firms to lead later stage rounds.

Since then the term has gained some flexibility and today we can largely define a solo GP as an individual who raises capital from traditional LPs to create a fund of their own to solely invest in startups at all stages.

Unlike angel investors, they are not using their own capital and tend to invest larger check sizes in later stages since they pool capital from LPs. As the name suggests, they are the sole member of the investment team but some create hybrid funds, where they remain as the main decision maker but hire support staff and rely on infrastructure to lift some of the management load.

Typical Solo GP background

  1. Serial Entrepreneur or Operator
  2. Previous Partner at VC fund
  3. Creator (social media, blogs, newsletter, podcasts)
  4. Niche expertise

What is appealing about the Solo GP?

  • Speed. With no partners to persuade, the speed of investments moves as fast as the GP moves.
  • Empathy. Solo GPs are generally former founder’s themselves which allows them to understand the entrepreneur's perspective and offer more appealing terms.
  • Audience. Solo GPs with a developed personal brand are often creators with their own audience which as a founder gains your company's attention and trust simply by association.
  • Expertise. Solo GPs may also have their own niche expertise they can offer to founders that a typical VC firm may not.

Why is the Solo GP on the rise?

  • Knowledge of tech and VC is continually being democratized by social media and creators which means there is less reliance on a fund and team of partners to invest.
  • There are more candidates to invest in and increased interest in joining the tech industry as tech enters the mainstream.
  • Growing infrastructure enables solo GPs to manage cap tables, track investments, raise money, and handle fund administration. Some include: AngelList, Carta, Vauban, Bunch Capital, Sidecar and Pin.xy
  • Creators can grow an audience of trusted supporters leading to the ability to easily allocate funds.
  • Venture capital has grown as an asset class leading more individuals to join. According to Pitchbook, in the three years prior to 2021, venture surpassed every major asset class with 15.85% annual returns.

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