
The Rise of the Solo Capitalists - yarapavan
https://nbt.substack.com/p/the-rise-of-the-solo-capitalists
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rfrey
"But over the last couple of years, there's been an increase in individuals
investing not just at the earliest stages of companies, but at the Series A
and beyond.

These individuals aren't just investing their own capital. They’re raising
dedicated funds and special purpose vehicles (SPVs) from traditional limited
partners (LPs)."

I don't mean to snark, but isn't this just individuals starting new venture
capital firms? Maybe it's newsworthy if new VC funds are being raised by
former tech founders rather than people with finance backgrounds, but it's a
different story.

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nogabebop23
I think the real change is a decline in the prestige of the VC firm, which is
often used as a signalling factor, combined with a rise in the profile of the
individual. It's still a pretty typical VC fund model, with a celebrity face
out front. I find it pretty interesting and a little funny that there appears
to be real value in differentiating where the money comes from, essentially:
"We fund companies with only the purest, artisanal funds, raised without
antibiotics or preservatives before they are lovingly invested in your firm".

~~~
scottlocklin
I think you nailed it. Most name brand VC firms reputations are based on a
couple of good decisions early in their careers. The time scales we're talking
about scream hindsight bias, and even in the best case where they made good
decisions rather than got lucky, whatever cargo cult training baloney they
come up with doesn't mean they will continue to make good decisions as they
pass the torch to whatever MBA dipshits they dig up as successors.

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zuhayeer
[https://spearhead.co/](https://spearhead.co/) basically converts founders
into solo capitalists under their own brand.

Easier than ever in some ways. Your personal network becomes your unique
sourcing advantage that firms can’t get dibs on. What do you know, founders
tend to trust other founders.

~~~
ramie
That is a super interesting model. Any idea who makes up the first three
"classes" of investors?

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divbzero
> _the ability to make very quick investment decisions (given you are the sole
> decision maker and don 't have to persuade any partners)_

This specific advantage also benefits Warren Buffett, except in a different
investment arena.

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bernardlunn
The trend is towards the follow model from social media. You follow
investments from individuals and pay them a success fee on exit. No more AUM
fee

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jeffreyrogers
Are they really "solo" though? In VC firms the VCs usually put up less than 5%
of the money as the GP, and then the LPs (pension funds, high net-worth
individuals, endowments, etc.) that are invested in the VC fund put up the
rest. I would imagine it is the same with some of these "solo" capitalists.

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launching
Looking forward to the new newsletter!

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xwdv
The problem with raising from Solo Capitalists is that some are toxic
individuals.

~~~
numair
You’re downvoted by the crowd, but you’re 100% correct. The world of solo
capitalism is a wonderful place for a bad actor to hide and thrive without
having to come to terms with what’s wrong.

We have to come up with better systems for accountability, for both groups and
individuals. Solving this problem is a major opportunity, given the growing
interest in ethical capitalism and socially responsible investing. Unlike the
situation in decades past, money to be made here, so I am assuming people will
work on this.

~~~
happyrock
Can you provide an example of what you're talking about?

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xwdv
Are you asking him to name drop some of the most despicable, dishonest,
sexually harassing, Solo Capitalists in the industry?

~~~
happyrock
surely someone with such a strong opinion would be able to cite an example...
?

