Angel
Moderator
How Much Cash Should a GP Bring in Year 1? Who to Hire? (USD-Based Guide)
Goal
Estimate Year‑1 burn vs. reliable income, find break-even timing, and define minimum staffing using a “Minimal Viable Syndicate” mindset.
1. Formula for GP Cash Needed
2. Fixed Cost (Excluding Payroll) – Rough USD Range
3. Core Roles & Staffing
4. Three Scale Scenarios (Break-even Timing)
(Assume smooth ops, average outcomes, purely illustrative)
5. Five Ways to Shrink Year‑1 Cash Need
6. Quick Checklist
Goal
Estimate Year‑1 burn vs. reliable income, find break-even timing, and define minimum staffing using a “Minimal Viable Syndicate” mindset.
1. Formula for GP Cash Needed
2. Fixed Cost (Excluding Payroll) – Rough USD Range
| Item | Lean Setup | Annual Range (USD) | Notes |
|---|---|---|---|
| Legal (templates, SPVs, term sheets) | Annual/per-deal retainer | $6k–$20k | More deals = more cost |
| Accounting / Tax | Outsource | $3k–$10k | Add for multiple SPVs |
| Insurance (D&O / E&O) | Optional | $1k–$3k | Depends on coverage |
| Tools/SaaS (Notion, Zapier, DocuSign…) | Essential | $1k–$3k | Startup plans help |
| Events/Community (pitch nights, meetups) | Essential | $3k–$10k | Venue, food, media |
| Brand/Marketing (site, design, PR) | Compressible | $2k–$6k | DIY to save |
| Subtotal (no payroll) | ~$16k–$52k | Scale dependent |
3. Core Roles & Staffing
| Role | Key Tasks | FTE | Outsource? | Monthly Pay (USD) |
|---|---|---|---|---|
| GP / Lead Partner | Fundraising, deal sourcing, decisions, external face | 1 | No | Carry/Equity + modest salary |
| Ops / Compliance PM | KYC/AML, process, docs, minutes | 0.5–1 | Part-time/contract ok | $1.5k–$3k |
| Analyst / Research | Screening, research, memos | 0.5 | Intern possible | $1k–$2.5k |
| Community / Marketing | Member ops, events, content | 0.3–0.5 | Project-based ok | $1k–$2.5k |
| Finance / Bookkeeping | Cashflow, recon, reports | 0–0.3 | Usually outsourced | $0–$1k |
- Minimal: GP + 0.5 Ops/Compliance + intern analyst
- Mid-size: add 0.5 Community/Marketing + 0.2 Finance
4. Three Scale Scenarios (Break-even Timing)
(Assume smooth ops, average outcomes, purely illustrative)
| Scenario | Positioning | Key Assumptions | Reliable Annual Income | Total Annual Cost | Gap (GP Cash) | Break-even |
|---|---|---|---|---|---|---|
| A. Minimal Syndicate | 4 deals/yr, small community + SPVs |
| Admin $19.2k + Members $30k = $49.2k | ~$60k | ~$10k (buffer $30–50k) | ~Year 1 |
| B. Growth Syndicate | 6 deals/yr, mid-size ops |
| Admin $46k + Members $38k = $84k | ~$105k | ~$21k (prepare $40–80k) | ~Year 1–2 |
| C. Micro Fund | $3.2M fund, 2% mgmt fee |
| $64k | $55–60k | ≈ $0 (need $20–40k bridge pre-close) | Immediate CF positive (carry later) |
5. Five Ways to Shrink Year‑1 Cash Need
- Pre-sell memberships/courses for upfront cash
- Collect part of SPV admin fee on soft commits
- Use free/edu SaaS tiers
- Get event sponsors (venue, F&B, media)
- Pay part of comp in equity/carry (still pay a base)
6. Quick Checklist
- How many deals? Average deal size?
- How much admin/member/mgmt fee can you collect—and when?
- Minimum fixed-cost stack?
- Team size & comp (FT/PT)?
- If zero exits in 12 months, how long does your buffer last?
- Deal count growth rate
- Win multiple/prob swings; exit timing distribution
- Follow-on reserve %
- SPV wind-down fee
- Carry hurdle rate