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How Founders Can Build Investment Syndicates in a Downturn



Navigating the world of Web3 investments can be an exhilarating journey, especially when the market is filled with abundant liquidity. However, things take a different turn during downturns, posing unique challenges. 

Recently, at Bitcoin 2023 Miami, Mike Jarmuz, the Managing Partner and Co-Founder of Lightning Ventures, along with Greg Carson, the Managing Partner of Humla Ventures, shared valuable insights on how founders can effectively scale their ventures and navigate uncertain times. 

Their expertise shed light on strategies and approaches that ensured resilience and growth, even in the face of adversity. This knowledge is invaluable for entrepreneurs aiming to thrive in the ever-evolving Web3 industry.

According to Greg Carson, the Managing Partner of Humla Ventures, founders should exercise caution and attention to detail when forming a syndicate of investors in the current market. 

He emphasized that the market has changed significantly compared to a year ago. A syndicate, as he explained, is a collective of individuals or organizations working towards a shared interest.

Amidst the proliferation of various business coin companies, Carson revealed that the key factor lies in those who have genuinely created value that would attract investor interest, along with those who maintain a realistic perspective.

Greg believes that investors are more inclined to invest in a company that possesses revenues, a prototype, and displays humility, even if their valuation is around $9 million. 

On the other hand, a company that has onlyprototype and has no revenue, but a valuation of $40 million may encounter additional obstacles. Greg stresses the significance of establishing value with investors during the formation of a syndicate.

Moreover, Greg emphasizes the importance of treating investors respectfully, creating an environment where they feel valued as members of the company’s team. Engaging with multiple investors simultaneously is recommended to generate interest and facilitate effective communication between them.

Start Small; Bring People together

Mike suggests that founders interested in syndicates should begin by investing a small amount in the projects presented to them. Additionally, he mentions the option for founders to run rounds where they involve their Liquidity Providers at an early stage.

Furthermore, Mike highlights the importance of connecting individuals, as his company does. By bringing together founders, investors, and talent, they facilitate problem-solving and help identify the right match for each project, making funding more accessible.

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