Angel
Moderator
How Much Cash Should a GP Prepare in Year 1? Who Do You Need on the Team? — A Practical Angel Syndicate Guide
Goal
Use a “Minimal Viable Syndicate” mindset to estimate Year‑1 burn vs. income, find your break-even point, and define the minimum team you actually need.
1. Year‑1 Cash You Must Bring In: Quick Formula
2. Fixed Costs (Excluding Payroll) — Ballpark
*Adjust to your currency. These are conservative US estimates.
3. Core Team Roles (Minimum Setup)
4. Three Scale Scenarios — How Much to Front? When to Break Even?
(Assume smooth ops, average outcomes, purely illustrative.)
5. Five Ways to Reduce Year‑1 Outlay
6. Quick Self-Check
Bottom Line
Build the sheet, run the numbers, and you’ll know: do we need member fees, how much admin fee makes sense, and how many deals to hit break-even. Start lean, iterate parameters yearly—much safer than guessing.
Goal
Use a “Minimal Viable Syndicate” mindset to estimate Year‑1 burn vs. income, find your break-even point, and define the minimum team you actually need.
1. Year‑1 Cash You Must Bring In: Quick Formula
2. Fixed Costs (Excluding Payroll) — Ballpark
| Item | Lean Setup | Annual Range (USD)* | Notes |
|---|---|---|---|
| Legal (templates, SPV docs, reviews) | Annual or per-deal retainer | $6k–$20k | More deals → higher cost |
| Accounting / Tax Filing | Outsource | $3k–$10k | Extra for multiple SPVs |
| Insurance (D&O / E&O) | Optional | $1k–$3k | Depends on coverage |
| Tools / SaaS (Notion, Zapier, DocuSign…) | Essential | $1k–$3k | Startup/edu plans help |
| Events / Community (Pitch nights, meetups) | Essential | $3k–$10k | Venue, F&B, media |
| Branding / Marketing (site, design, ads) | Compressible | $2k–$6k | DIY to cut cost |
| Subtotal (no payroll) | ~$16k–$52k | Scales with activity |
3. Core Team Roles (Minimum Setup)
| Role | Key Tasks | FTE | Outsource? | Monthly Pay (USD est.) |
|---|---|---|---|---|
| GP / Lead Partner | Raising, deal sourcing, IC lead, external face | 1 | No | Carry/Equity + modest salary |
| Ops / Compliance PM | KYC/AML, process, docs, minutes | 0.5–1 | Part-time / contractor possible | $1.5k–$3k |
| Analyst / Research | Screening, market/financial research, memos | 0.5 | Intern OK | $1k–$2.5k |
| Community / Marketing | Member ops, events, content | 0.3–0.5 | Project-based possible | $1k–$2.5k |
| Finance / Bookkeeping | Cashflow, reconciliation, reports | 0–0.3 | Usually outsourced | $0–$1k |
- Minimal team: GP + 0.5 Ops/Compliance + intern analyst
- Mid-size: add 0.5 Marketing/Community + 0.2 Finance in-house
4. Three Scale Scenarios — How Much to Front? When to Break Even?
(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 (keep $30–50k buffer) | ~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 on exit) |
5. Five Ways to Reduce Year‑1 Outlay
- Pre-sell memberships/courses to front-load cash
- Collect part of the SPV admin fee upfront (on soft commits)
- Use free/edu SaaS plans
- Find sponsors for events (venues, F&B, media)
- Use equity + carry to offset salaries (still pay a base)
6. Quick Self-Check
- How many deals in Year 1? Average deal size?
- How much admin/member/mgmt fee can you really collect, and when?
- What’s the leanest fixed-cost stack you can live with?
- How many heads (FT/PT) and at what pay?
- If there’s zero exit for 12 months, how long can your buffer last?
- Deal count growth rate
- Win multiple/probability swings; exit timing distribution
- Follow-on reserve %
- SPV wind-down cost
- Carry hurdle rate (if any)
Bottom Line
Build the sheet, run the numbers, and you’ll know: do we need member fees, how much admin fee makes sense, and how many deals to hit break-even. Start lean, iterate parameters yearly—much safer than guessing.