Most people think venture capital evolves in big, cinematic moments—new funds, bigger rounds, splashy IPOs. In reality, the biggest shifts happen quietly… in the plumbing.
This episode with Nik Talreja, Co-founder & CEO of Sydecar, is about exactly that: the invisible infrastructure reshaping how money actually moves in venture. And if you zoom out, it tells a much bigger story about where the industry is headed.
The Old Model: One Big Bet, Blindfolded
Traditional venture capital is built around a simple idea:
Raise a large pool of capital. Deploy it over time. Hope the hits cover the misses multiple times over.
LPs commit money without knowing exactly where it goes. GPs get flexibility. Everyone agrees to wait 10+ years.
That model worked—really well—for decades.
But it also has cracks:
LPs have limited control over specific investments
Liquidity is slow and unpredictable
Access is concentrated among a small group of managers
Raising funds is… brutally hard (ask your favorite emerging manager!)
Now imagine telling modern investors—used to real-time data, on-demand access, and direct ownership—that they should wire money and wait a decade with limited visibility.
That tension is where SPVs enter.
The Shift: From Funds → Deal-by-Deal Capital
Nik’s core thesis is simple but provocative:
SPVs aren’t just a tool—they’re becoming the default.
Instead of committing to a blind pool, investors can choose specific deals, one at a time.
Want exposure to a breakout AI company?
Back it directly through an SPV.
Want to skip a deal?
No problem—you’re not locked in.
This flips the model:
From manager-centric → to asset-centric
From bundled risk → to selective exposure
From long-term opacity → to transaction-level clarity
It’s not that funds disappear—but their dominance gets challenged.
Why Now? Three Forces Colliding
1. Technology is collapsing friction
What used to require lawyers, spreadsheets, and weeks of coordination can now be automated.
Sydecar’s entire thesis is built on this:
If you can automate entity creation, banking, compliance, tax, and reporting… suddenly SPVs become scalable.
Lower cost → more deals → more adoption.
2. Investors want control (and speed)
Institutional LPs, family offices, and even individuals increasingly want:
Direct exposure to specific companies
Faster deployment cycles
The ability to double down—or opt out—on demand
SPVs give them exactly that.
3. Liquidity is becoming the real game
Here’s the subtle but important shift Nik points out:
The future of venture isn’t just about picking winners—it’s about managing liquidity.
Companies are staying private longer.
IPO timelines are stretching.
Secondaries are booming.
That creates a new need: ways to enter and exit positions without waiting a decade.
SPVs are a natural vehicle for that.
The Contrarian Take: SPVs Could “Eat” Venture
Nik’s boldest claim?
SPVs may become the primary way capital gets deployed in venture.
Not a side tool. Not a niche strategy. The main event.
Why?
Because they align incentives more tightly:
Investors choose deals directly
Managers earn per asset, not just AUM
Capital flows where conviction is highest
In a world where information is more accessible and networks are broader, that model starts to feel… inevitable.
But It’s Not Frictionless
There’s a reason venture funds still dominate.
Running SPVs comes with real challenges:
Coordinating investors and timelines
Navigating compliance and regulatory thresholds
Managing long-term obligations (taxes, reporting, distributions)
Handling founder expectations in fast-moving deals
Most first-time managers underestimate this.
As Nik puts it, the hardest problems aren’t sourcing deals—they’re operational discipline and trust.
A Glimpse Into the Future
If you fast-forward 5–10 years, a few things start to look likely:
Venture firms act more like portfolio orchestrators than capital pools
Late-stage investors behave like liquidity providers, not just growth backers
Retail and wealth channels gain greater access to private markets
Infrastructure platforms (like Sydecar) become the rails everything runs on
And maybe the biggest shift:
Private markets start to look a little more like public markets—
more transparent, more standardized, more liquid.
Not identical. But closer.
The Real Insight
This isn’t just about SPVs.
It’s about a deeper transition:
From trust-based systems → to software-driven systems
From gatekeepers → to platforms
From bundled bets → to modular capital
Nik’s story—from a childhood in a family business to building venture infrastructure—mirrors that shift.
Start small. Solve real problems. Build leverage.
Final Thought
Venture capital isn’t being disrupted by a new fund.
It’s being rewritten by better pipes.
And the people building those pipes?
They might end up shaping the future more than the people picking the startups.
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Chapters:
00:01 – Intro & Nick’s background
00:36 – Childhood, family business, early entrepreneurial exposure
02:00 – From law to venture investing & discovering SPV pain points
03:00 – Why AngelList and incumbents fell short
04:36 – How Sydecar achieves low-cost SPVs through automation
06:00 – Customer experience philosophy & “customers as guests”
07:18 – North star metric: touchpoints to close a deal
08:03 – Balancing flexibility vs compliance in SPVs
09:17 – SPVs vs funds & why Sydecar doubled down on SPVs
11:57 – Fund admin landscape & recommended providers
13:30 – Core problems Sydecar set out to solve
15:03 – Simplicity vs complexity in product design
16:07 – Trends in private markets: secondaries & direct deals
17:16 – Cyclicality of venture & managing a durable business
18:29 – Advice for first-time SPV managers
20:00 – Regulatory risks & investment advisor thresholds
22:00 – Misconceptions about SPVs vs traditional funds
23:03 – Institutional demand & rise of SPV strategies
24:03 – Nick’s personal investing vs building Sydecar
25:32 – Scaling the company & fundraising decisions
26:15 – To raise or not to raise: dilution vs growth
28:04 – AI’s impact on building fintech products
29:17 – Future of venture stages in an AI world
30:30 – Late-stage venture becoming liquidity providers
Transcript
Brian Bell (00:01.782)
Hey everyone, welcome back to the Ignite podcast. Today we’re thrilled to have Milktail Vraja on the mic. He is the co-founder and CEO of Sidecar, an SPV administration platform that helps venture investors run SPVs by automating the messy back office, banking compliance reporting and more. First all, I am a customer and a big fan, so I’m glad to have Nick on the program, whose path runs through a big law of venture building and the weeds of private markets. Thanks for coming on, Nick.
Nik Talreja (00:29.038)
Thanks for having me, Brian. Pleasure to be here.
Brian Bell (00:30.59)
I’d love to start with your origin story. How’d you get to where you’re at?
Nik Talreja (00:36.712)
well, it goes all the way back to the childhood for me. I grew up in a family business. My parents started a business out of necessity just to make ends meet when I was about 10. And they couldn’t afford daycare, so they threw me into the business. And I worked alongside them throughout school and even college. And seeing a business being built firsthand really planted a seed in me of wanting to do the same in my life at some point. I really enjoyed that journey. I saw my family move from poverty to having created some wealth for themselves. And I was really inspired by that. Long story short, you nailed it as far as my journey thereafter. I ended up getting a degree in finance, went to law school, worked in big law for a while. And that experience taught me a lot. Many things that I didn’t want to learn, some things that I’m really grateful for now. In the journey of practicing law, I got to work with venture capitalists and founders and founders really loving the founder journeys that I was associated with. And I eventually started investing some capital of my own behind founders I really believed in. And that led to realizing that a community of folks around me that wanted to invest in some of the same businesses and I started to wear more of a venture capital hat. That’s how I met my co-founder David. We started syndicating SPVs and we hit a bunch of pain points. At the time, There was a company called Assure Fund Admin that existed and AngelList and they were the two vendors that we could choose from and both had some flaws that we couldn’t accept. One was an AngelList case that they had a marketplace model where we didn’t want to take our LPs to a marketplace where they could be solicited for other deals and Assure just seemed to have a really messy.
Brian Bell (02:18.23)
Bingo. read a whole article on this called Angelist for Breaking Up. I don’t know if you crossed your radar when I removed myself from Angelist, you know, three years ago. Yeah, I mean, I was like, I had LPs reaching out and saying, Hey, is this your fund? I just had angels reach out. Is this your fund? Like, no, that’s not my fund. That’s somebody else’s fund. Oh, well, they reached out about it right through Angelist. And I’m like, Oh, man. And that happened enough times. I was like, why am I why am I helping Angelist?
Nik Talreja (02:26.986)
Yes, you get it. Yeah.
Nik Talreja (02:46.338)
Right. Yeah. So in a way that the models counter to the interests of some of their users and you know, they’re a great business. I know a lot of people there who are awesome. But you know, we didn’t.
Brian Bell (02:55.125)
yeah, great platform if you don’t mind giving your LPs to a marketplace.
Nik Talreja (03:00.192)
Exactly. So, you know, we chose not to use them. And then that left us with another option that was very service oriented and we just we couldn’t accept the price point. So we looked to ourselves and we’re like, hey, we’re attorneys. We can get messy with the documentation. How hard can it be beyond that? So we started to roll around SPVs or random math. We able to get the cost down to something that was really acceptable for us. And lo and behold, through my law firm, we had a bunch of other VCs reach out and say, hey, I see that you’re doing this for yourself. Can you do it for us, too? And that turned into a business of its own and Sidecar was born in late 2020 and officially early 21 is when we incorporated and the rest is history.
Brian Bell (03:36.419)
Good market timing too. mean, that was the heyday of SPVs. know, 2021 is when I was getting into it. I think I did my first SPV in mid-2020 on AngelList. And yeah, that was the heyday. Good times. I feel like we’re back to that a little bit, right? feels like a little... 2026 is feeling a little like 20... It’s not as frothy as 21, but it feels like we’re kind of back a little bit.
Nik Talreja (03:49.368)
Yeah, that was good times. Make hay while the sign shines.
Nik Talreja (04:01.934)
Yeah, yeah, it kind of feels like it. It feels different this time though. It feels a little bit more concrete.
Brian Bell (04:06.71)
Yeah, yeah, these companies actually have revenue. How do you so I’m curious as a customer. mean, one of the reasons I chose you guys and I’ve run, you like I said, before we started recording dozens of SPVs with you guys. So I was excited to do the pod really. How are you able to get the cost so low? You guys are the like for the quality level of the platform, which is very high. You guys have that, you know, 4500 price point, you know, and, you know, scales with the money that you raise. But how are you guys able to get it so low? Because everybody else is like 10K, 15, 20K.
Nik Talreja (04:41.166)
Right. Yeah. It all comes down to automation and on the lower end, of the accepting a slightly lower margin to enable a market to exist that we want to grow with. But we make the math work through automation. So everything from entity creation to funds flow, record keeping and accounting and tax is streamlined. So at that $4,500 price point, you know, we’re able to still get a decent margin by basically automating every part of that workflow. so that our cost is ultimately driven by that support can get, not anything else along that journey. And like you mentioned, support is a big part of the value prop and service that we offer. It has to reach a really high standard for us to have a right to exist. And we’re committed to primarily serving you, right? Whether it’s through software or whatever you may need, you don’t really care necessarily. It’s when your LP is to have a good experience, right? So that’s paramount for us.
Brian Bell (05:39.829)
Yeah, and I’ll say as a customer, your guys’ service is exemplary. It’s very helpful, very knowledgeable, always there. I can ping the operations at Sidecar and get a response very quickly. How are you guys maintaining that level of customer service?
Nik Talreja (06:00.59)
You know, it starts with our values and there’s an unspoken value that, you know, customers are the MVP, right? We don’t need to write that in our values for that to be true. It’s kind of like a baseline of like, that is what Sidecar’s about. I think for me, it started in childhood when I saw my family start this business. Like my parents would tell me when I was a kid, like treat their dick. We imported gemstones and other sort of jewelry related.
Brian Bell (06:19.498)
What was the business by the way? What were you guys doing?
Nik Talreja (06:27.746)
things from India and China and then sold it to jewelry designers in LA who would then basically take our materials and make fine jewelry out of it.
Brian Bell (06:35.119)
okay. Import export. Yeah.
Nik Talreja (06:37.134)
Exactly, just basic trade. But my parents would teach me as a kid, just to keep it simple, treat our customers like guests. Like as if they were coming to our home, how would you treat someone that’s a guest? And I was like, oh, that’s pretty simple, I get that. And that value stuck with me to the point of like, I started Sidecar, like I would, we tirelessly tried to meet expectations or exceed expectations in the early days, even when the software wasn’t where it needed to be. And that’s still something that we take very seriously today, is that you have to have a good experience, right? Regardless of everything else here.
Brian Bell (06:46.037)
Hmm.
Nik Talreja (07:06.668)
And I think because of that, you know, everything on the customer experience team is balanced against metrics that prove that you are having a good experience, right? Those are like the paramount metrics we track.
Brian Bell (07:18.954)
Yeah, let’s see. What is the North Star metric at a company like Sidecar? What’s the thing that, know, like when that’s going up into the right, you’re happy.
Nik Talreja (07:28.108)
Yeah, so good question. You we’re always asking ourselves these questions. Of course, revenue matters. We’re a venture-backed company. We need to keep growing. But if we had to think about one metric that meant we were doing things well, I would distill it down to the touch points per customer to get a deal closed. Right? So if we can minimize that over time, it means that you’re able to get your job done either by getting really comprehensive support from us in simpler easy to understand answers, or the software is working for you really well. And both of those points out, we’re doing a good job for you. Yeah.
Brian Bell (07:48.182)
Mm.
Brian Bell (07:59.894)
Yeah.
Brian Bell (08:03.242)
Touch points to close. I like that, yeah. And you guys do a really good job of that. What I like about it is you give us enough rope but not enough to hang ourselves with as GPs. Because sometimes I’ll be doing something and they’re like, yeah, you can’t do that. But yeah, it has a lot more flexibility than AngelList. Where do you kind of draw that line with compliance and regulation and making it easy to use but also having the guardrails?
Nik Talreja (08:27.276)
Yeah, so one line read. for sure. There’s one line we draw clearly. It’s like, we’re not your law firm. We’re not your counsel. So we try to educate you as much as we can through the product experience and then point you to education when you need it outside of Sidecar. The other place is we don’t act as an advisor in your deals. We don’t shop anything to your LPs. We want to enable you to do your job as an advisor, right? So within that construct, we can offer more customization and flexibility. Now, in some cases, you might be doing something that will force you to have to register as an investment advisor. We make that clear to you like, hey, just FYI, you should talk to council about that. But we generally don’t want to inhibit you from doing anything you want to do on the platform. So there’s a, I think the line keeps moving out as far as what we offer on customization.
Nik Talreja (09:17.566)
Yeah. And then you guys, think, have recently pulled away from running funds. Maybe you talk about like SPVs versus funds and kind of how the business is evolving.
Nik Talreja (09:28.482)
Yeah, great, great call out. Earlier this year, we made the hard decision to stop supporting Fund Plus as a product and pass that business on to a couple partners that we have a lot of faith in. The reason for that is when we think about our right to win and we think about the broader private market that we participate in and serve, we kind of see our right to win as building out SPDs and other turnkey structures. and automating that to the nth degree so that the price point to transact keeps going down. And when we think about that value proposition, it doesn’t necessarily correlate with building a full life cycle fund services business for venture capital. You know, if we’re trying to build a venture, right, yeah, that’s what we landed at discovering. If that’s a completely different business and we had to choose two, which would we choose? We want to certain types of structures.
Brian Bell (10:09.802)
which is a completely different business, right? Yeah. Yeah.
Nik Talreja (10:23.406)
for the entire private market ecosystem. And that’s what made it clear to us that Fund Plus for that to be successful, we’d have to eventually scale and customization support investor reporting and services, know, more customers support more people. And that’s not something we wanted to do instead. We want to automate as much as possible around a few structures that everyone can come to us for, including potential competitors, had we gone down the Fund Services route. So when we talk about angels and Carter today, you we might think of them as a competitor. But I think about the Morris potential partners and maybe even customers of the SPV product in the future.
Brian Bell (10:56.084)
Yeah. Yeah. One thing, one reason I didn’t choose you guys for the fund and, you know, and you can tell me why this is a thing, but we’re a very high volume investor. We’re doing 150 in funds two and three. Right. And so when I priced it out, I was like, with 150 positions on Sidecar and the fund plus, it’s going to actually cost more than just going with Decile, which is what I use. I went through VC lab. Yeah. So that was just like a little context. Who is like the leading? fund provider in your mind? Like, who do you kind of look up to on the fund side of things where you’re like, we don’t run funds anymore, but you should go talk to, and you can name three names if you want, like in no particular order. Because there’s big ones out there. There’s Carta, of course, right? You got Aduro. You got Juniper. Angelist, obviously, runs funds. Like, who do you go, OK, who would you send your guests to? And I’m asking for myself really, because I’m about to choose another fund admin for another fund.
Nik Talreja (11:57.496)
Yeah, I think it really depends on what you’re trying to accomplish. If you’re building out a multi-stage fund business, right, where you want to stick with the fund business and scale into, let’s say, $500 million of AUM over some period of time, I think that Cardo and Adura do a pretty good job. I think Cardo’s gotten a pretty bad reputation, but they’ve solved for it by hiring... Yeah, but I think they’ve solved for a lot of stuff internally, and they have a pretty stable platform. I think Aduro’s great as far as being a bit more of a traditional fund admin, and I think you know what you’re getting there. Pricing is probably similar. If you’re willing to work with more of the emerging company side of the equation, we actually partnered with a company called Zive based in Austin that’s building out a really cool product. Yeah, I put an angel check. outside of that, if you want more of a manual but predictable, reliable, always will be there to answer questions type of fund admin. Standish has a pretty good reputation, but they’re very expensive. NAV has a pretty good reputation. They’re a bit more cost effective. So it really depends on what you’re looking for. So high touch, Standish NAV emerging.
Brian Bell (13:20.672)
Yeah. I almost have to go with I’m an investor and that way I can tell my LPs like, yeah, we’re an investor in this agentic fund admin company and we’re using them. know, it’s well, that’s cool. Yeah, that’s funny. So when you guys set out to solve the this this market, right, the SPV side of things, what were kind of the two or three concrete problems that you had to solve no matter what?
Nik Talreja (13:50.322)
One, well, I’ll think about this from a couple of different angles. One is the value proposition has to be really strong, right? So we have to be able to do a job for our customers that is trustworthy and credible at a very attractive price point so that you can run a $50,000 SPV and still make it make sense from a fee standpoint. Two, we have to be able to make the math work and the service work over the service term. right, which is 10 years. And that includes a lot of tax filings. So we need to automate tax, right, to make that make sense and understand the tax regulation and the impact of different types of assets and how that might change the our cost to serve our SPVs. The third is flexibility. So we’ve taken a standardized approach to creating what we do, but we know that our customers will constantly want to push us in new directions and we’ll have business pull that might take us down like a complex carry structure type of waterfall, right? So how do we build a infra business that is scalable to accommodate more customization over time without overthinking it in early days? That was a real challenge that we figured out in year two, right? And had to kind of reinvent ourselves.
Brian Bell (15:03.232)
Yeah, I was trying out Capital Co. Shout out to Brian over there. And it was so advanced. Like got into the platform and it was just like, could, like that was a platform that has so many knobs and dials. I couldn’t even figure out what to do. know, like it was very advanced. was a very awesome platform. But I was like, I feel like I don’t know what I’m doing here as a solo GP that doesn’t have a lot of time to sit there and just kind of like move the dials and knobs. I just need to kind of. collect the money and wire the money, you know, do the job for me. People don’t, you know, I don’t know. Like, how do you think about that? Like, people don’t want the drill, they want the hole in the wall.
Nik Talreja (15:44.674)
Yeah, I think people want to keep it simple and get the job done and ultimately just make sure their LPs are taken care of, Yeah, for sure.
Brian Bell (16:07.448)
Yeah, that’s pretty wild. So what’s changing besides redoubling your efforts on SPDs? What’s going on in the private markets today? What are you kind of seeing out there?
Nik Talreja (16:07.448)
Secondaries are a wave, a big wave. A lot of deals getting done in 20 or so names, right? We’re seeing that institutional investors have an increasing appetite for direct deals versus just backing funds, which I think is interesting and it’s not just venture type deals. It’s even more mature PE. style companies that they want to invest in directly or assets they find where they want to create a franchise business or whatever, right? Just somewhere. But it tends to be more of a direct sell offering.
Brian Bell (16:51.158)
How do you deal with the cyclicality of the business, right? Because you’re going to, mean, 26 is going to be a great year for you. I mean, it’s a great year for me, right? I’m seeing it in my business and it’s easier to raise money than it’s been in four or five years. You know, I raised my first fund off Angelist in 22, 23. It was a slog. And now I feel like I can raise money just no problem. How do you deal with that? Do you have to escrow some money? When I close an SPB and it’s $10,000 to sidecar, do you book all that revenue or do you accrue it? You have to accrue it over the length of the SPB, I would imagine. Kind of smooth out the business a little bit.
Nik Talreja (17:33.166)
That’s correct, yeah, we crew. A large portion is accrued upfront because that’s tied to our direct costs upfront. But then there’s a portion that’s accrued over the service term. Private markets are cyclical, but we’re in it for the long haul. We believe that the CAGR or private markets will continue to be healthy for the next 20, 30 years. So despite any cyclicality in the next couple of years, we want to be around, which means we’ve got to prepare ourselves from like a margin standpoint, from a cash standpoint to make sure we can get through any storms and make hay while the the sun shines. So we have a healthy balance sheet. We were cash flow positive last year. We’re cash flow positive this year, I think so far, by a hair, maybe not, I’m not sure. That’s not the intention, but we have a very healthy balance sheet while we grow. So that helps and our economics, our margins are healthy. So we want to make sure that stays that way.
Brian Bell (18:29.118)
Yeah. So there’s probably lots of VCs listening that have never run an SPB because I hear from them all the time. Maybe they’re angels. Maybe they’re VCs. They’ll ask me, they’ll say, hey, what should I use? I’m like, I use Sidecar. the link. What would you say to them? Like getting started. What should they know about getting into this business that you wish you knew when you started?
Nik Talreja (18:54.865)
couple things. Timelines are always a moving target. Right? So I think on the one hand, you’re balancing a timeline with a founder that’s like, I need your money tomorrow. When it may not really be tomorrow. On the other side of dealing with all the pings that you know, right? Exactly. Yeah.
Brian Bell (19:08.704)
Right. All the time. we got to close by Friday. Okay, great. Yeah, okay. Friday. Yeah, sounds good. I’ll check in with you on Friday. Friday comes. I’m going to need another five days. Okay, five days. Okay, yeah, five days. This happens all the time in deals. Yeah.
Nik Talreja (19:20.942)
Exactly right. The need the money by Friday and you ask when they deal close three weeks later. Happens all the time. Not to say that you should be the last check in because that would be terrible but like you you need a massage that time with the founders so you have enough time to coordinate with your LPs who you don’t want to pressure to like fund tomorrow if they haven’t had time to think about something. So you kind of have to balance these like timeline expectations on both sides, right? And increase the pressure on the LPs to wire and take action as is necessary, but also massage the founder relationship to make sure you have enough time to like not pressure your LPs. I think that’s something I wish I knew and at times coordination around that was really hard in early days for us. The other thing is, this is me kind of wearing the lawyer hat. There are a lot of regulatory issues in being a manager, right? There are duties that you have as an advisor. You got to take that stuff seriously. So learn about it. Learn what it means to have fiduciary duties. And also learn about how, as a VC, you’re typically in this exempt reporting advisor land where you don’t have to register as an investment advisor and honor a bunch of compliance obligations. That is only true if you primarily invest in private company securities directly, where you’re buying those shares in the company. If you do a bunch of secondary stuff, and specifically if you have a single SPV that buys let’s say a secondary asset, that could put you on this path to have to register as an investment advisor at some point. Now that point is when you cross 150 million in AUM, so you may not think that’s coming anytime soon, but that’s measured at current value, market value. So let’s say you do invest in a kick-ass company that’s now worth like $50 billion, you might get that, right? So just know what you’re signing up for from a regulatory standpoint.
Brian Bell (21:09.47)
Yeah, yeah, and there is a regulatory drag. I’ve already talked to my council about this, actually, because I’m definitely going to cross that threshold. Definitely have a lot of SPV secondaries on the cap table here at Team Ignite. So yeah, I’m going to have to pretty much, when I cross that 150, register as an RA. Yeah, it’s going to happen.
Nik Talreja (21:28.162)
Yeah, either register or part and find a way for someone to take that business in a way and kind of like return economics to you. There are different ways to massage it, but lawyers don’t like to get too creative, right? So you kind of have to figure it out earlier and make sure you have a plan.
Brian Bell (21:49.162)
What do you see is the biggest misconception emerging managers have about running SVVs? Compliance and phone structure generally.
Nik Talreja (22:07.084)
You know, I think there’s still a good group of fund managers that don’t think that SPVs should be a meaningful part of their business. Like they think that the fund should be the primary mechanism for how they run their business. And I think that this is my hot take. I think that SPVs become a primary mechanism for deploying capital as far as measuring by dollars deployed by managers.
Brian Bell (22:32.32)
What is the percentage? mean, do know that stat like of the 100 billion or so in venture capital every year? how much is sitting in SPVs? wonder. It’s got to be a pretty big percentage.
Nik Talreja (22:43.49)
I’m sure it’s, I wish I knew, it’s actually a really good figure for us to chase down, but it’s gotta be sizable. And I think it’s Yeah.
Brian Bell (22:46.324)
Yeah. Yeah. It’s got to be tens of billions. I mean, because you think about all the liquidity events, all these cap table funds, all these SPVs, all these follow on rounds, all these pro rata, pro ratas floating around, it’s got to be a pretty big number.
Nik Talreja (23:03.96)
Right, because look, if you have institutional MPs that are saying, hey, we want to do more direct stuff, right? How do they do that? Through SPVs. That even triggers like these, the top 10 VCs by AUM to have to think about an SPV strategy. And we hear from some of them, which is super interesting.
Brian Bell (23:20.98)
Right. Yeah. And some of them run their own SPVs, right? They have their own like legal teams and they do that and they get big enough to do that.
Nik Talreja (23:28.098)
Yeah. And some of these deals where you may have a pro-rata share in like an anthropic race, right? Or whatever it may be. Can you really fulfill that with just the fun? Probably not, but there’s tons of appetite.
Brian Bell (23:35.327)
Yeah, you got a five or 10 or 25 million dollar pro rata to fill like, yeah, or you’re at a reserves in your fund or yeah, these are great problems to have. I wish I had those problems maybe five or 10 years from now. Hopefully we’ll have some of those problems. But what about you personally? mean, I would find it hard to pull back from investing in startups. Have you pulled back at all to run Sidecar? Are you still kind of, were you running funds before? Are you still running SPVs yourself? Are you a customer of your own platform?
Nik Talreja (24:03.982)
Yeah, thank you. All of the above except we didn’t start a true GPLP fund. We had an ambition to do so and then COVID hit and we switched to an SPV strategy in 2020, which is what led to Sidecar. I wish I had more time to invest, but building a business is like all encompassing. So, you know, I spent a lot of my time thinking about how to optimize our business and add great people to our team. I do still. write checks, but I don’t syndicate SPVs as much as I used to.
Brian Bell (24:34.388)
Right. Yeah, I would find it hard. mean, in a way, being a VC, you know, and backing 100, we did 131 investments last year in 2025, very high volume. And I just love meeting founders and backing their crazy ideas and talking to them on the podcast and stuff. I’d find it hard to like really just go work on something for 10 years, but I’m glad there’s people like you doing it because this is like a tool that the industry needs, right? It’s just so needed. platform like Sidecar that’s not Angelist, that’s affordable and automated. And so thank you for that work. We need that. And from all the GPs out there, thank you.
Nik Talreja (25:17.806)
Well, thank you for trusting us and giving us a reason to exist and do good work. But yeah, we still have a long road ahead, man. We’re still early. It still feels like, I mean, it feels like we’re kind of.
Brian Bell (25:27.22)
Yeah. But still early days. mean, you guys just raised your Series A last year, right?
Nik Talreja (25:32.526)
When was it? Yeah, year and change ago. Yeah, that’s right. Series A. And yeah, I think we’re probably pulling in series B metrics now. We might raise a series B or I don’t even know if we’ll, candidly, if we’ll need the cash. think we can scale this business to a really healthy spot without raising more, potentially.
Brian Bell (25:49.405)
Yeah, how do you think about that for the founders listening? Because you’ve kind of gotten a product market fit. Everything’s frothy right now. Business is going great, right? Your cash flow positive. Do you go raise a massive Series B and just try to go tackle the market? Or does it really, do you need to even, right? Because at this point, if your cash flow positive, can you just take the cash flow and reinvest in the business? How are you thinking through? That’s a great problem to have.
Nik Talreja (26:15.97)
Yeah, I think we’re in a unique position given our business that we collect a good amount of cash upfront in our business. I don’t think my answer here can apply to every founder. But if you are cash flow positive as a business and you have a healthy balance sheet, I think it behooves you to think about things like dilution for your team, right? Against a potential raise. Exactly, right? And raising may still be the right answer. I mean, if you have access to capital and you can raise on really great terms, it’s hard to say no to that. But you’re signing up for a new set of expectations and potentially some dilution that maybe it odds with building a business in a really healthy, stable way. And I think that’s something that most founders don’t really think about as much as like, hey, what does it take to build like a legacy business over a decade versus just like a flash in the pan type of business that may. reach some astronomical valuation in two years or not and then fail. We’re in the financial services. Like we make a commitment to you, which means like, I’m not trying to like triple this business next year if it means that we can’t honor a commitment to you at a level of quality that we made to you two years ago.
Brian Bell (27:26.614)
Right? Yeah, that totally makes sense. think it’s tricky, right? Because if you go raise 20 or 30, let’s call it, on a Series B, and it might even be more than that for you guys, you’re going to take the 20 % dilution. And then the question is, OK, if I have tens of millions of dollars, does it help me fulfill my promise to the customers and move faster? And if it doesn’t increase that ability. to acquire customers and serve them and grow fast, then it doesn’t, yeah, I don’t think it’s warranted, right?
Nik Talreja (28:04.542)
It’s getting easier to build. It’s getting a little bit less expensive to deploy new features. So that’s another.
Brian Bell (28:06.378)
Yeah. Right. Yeah. Have you kind of felt that as you’ve kind of been doing this now for five plus years? Are you kind of feeling that in the organization? Well, you hear it a lot on the podcast out there and stuff that it’s just, you’re just able to deliver product much faster.
Nik Talreja (28:23.362)
Yes. So funny enough, we have this thing called SideStar Awards. Basically, at our off-sites annually, we have these awards for those who exemplify our values. We have four values that are near and dear to our hearts. And we have this poll. like, who do you want to nominate for X SideStar Award? And funny enough, everyone’s like, Claude. Claude should get all the awards. And it’s true. Claude, Claude code for engineers is changing how they they work pretty dramatically for me. I’ll give you an example. I’m going to Fintech meetup in a couple of weeks and I wanted to figure out who I should meet with. So I asked Claude to go through the entire attendee list and find people who are interested in private markets or whatever. I got a list of 100 names. I was able to spend 15 minutes versus six hours looking through a bunch of names. So it’s changing everything we do at a pretty fundamental level.
Brian Bell (29:17.13)
Yeah, that’s incredible. Yeah. And so I feel like I’ve been thinking a lot about this existentially as a VC. What disappears first, you think? kind of the growth stage, late stage venture capital or, yeah. So you have three stages, really. You have the early stage, the pre-seed seed stuff, and you can maybe put A in that bucket. And then you have the A, B, and C stuff. And then you have kind of the late stage stuff. Right? If AI has like this superhuman ability to create and do things. Where do you think, what do you think disappears? Because I feel like maybe we’re seeing the last gas of the late stage right now, this kind of frothy, like late stage stuff. you know what I mean? And maybe that sort of, or maybe it’s more of everything. It’s kind of just more of everything at every stage with AI in five years from now.
Nik Talreja (30:08.632)
I don’t think we even know yet. And I think people have a lot of opinions that are changing. You know, to answer your question about what happens in venture, my personal view is that late stage turns from, it strips from, we’re going to help companies raise capital that they need to keep growing to, we’re a liquidity firm, right? We’re buying out earlier investors and taking a position for the next growth wave.
Brian Bell (30:30.454)
Yeah, it’s like a private stock market. Like a private market maker, like a private Merrill Lynch, basically.
Nik Talreja (30:32.044)
Yeah, basically. Yeah. Exactly. And our view is that should take place through SPVs, right? As a perfect conduit for the underlying equity. yeah, I think we don’t know yet, but there’s going to be a lot of change for sure.
Brian Bell (30:48.704)
What do think the SEC will do about these private companies staying private till a trillion dollars? I mean, I don’t think we’ve seen anything like that in the history of capitalism. mean, trillion dollar private companies is just insane. At some point, yeah, we got to let the retail guys in, know, like, sooner.
Nik Talreja (31:08.15)
Right. Yeah, it’s happening. know, one of the things I didn’t get to answer when you asked me about what’s changing or what the world looks like, I think one of the big things that’s changing is also the retailization of private markets, right? So you see companies like Robinhood launching like a private company fund, right? I think it launched this week or price this week or whatever. We see a lot of retail demand flowing in through SPDs into late stage companies that, you know, are mature but haven’t gone public yet. The incentives to go public are shifting out. Like you mentioned, you have a trillion dollar private company, never has to go public. And maybe liquidities cater to through these late stage growth equity firms versus having to go public. There’s a lot of stuff that’s changing. I think ultimately the wealth still comes from the retail market. Now the conduce through which it flows typically was like retail to public company, but now it’s like retail to wealth advisor to like growth equity to liquidity, or maybe at some point retail to platform to liquidity. right of a company directly. And I think that the world’s changing quickly. As far as what the SEC does to answer that first question, I don’t know. But you know, I read something this weekend about how the SEC is considering going doing away with quarterly reporting of financials for public companies. So obviously regulatory easing isn’t on the table. What does that mean for the private markets? I have no idea. But if we’re seeing easing in the public markets, maybe we’ll see some harmonization in the private markets. We’re like, you know, Larger private companies have to report some stuff, but not the same as a public company. Public companies have to report less stuff. I have no idea where that’s going to go. I really hope there is some guidance from the SEC on how to do the job of a fund manager that’s indicating secondary investments, because that is a place where you see all kinds of stuff today. And I think the market would really benefit from guidance on management fees, guidance on carry, guidance on things for being essentially a finder where people are acting as VCs. but kind of look like a finder. And that’s the real issue today.
Brian Bell (33:16.15)
When you see exits on the platform, and I’m sure you’ve seen quite a few, what does the structure of that typically take? Is it mostly cash? Let’s take an IPO. Is it mostly cash that the managers are distributing to LPs, or are you literally having to set up brokerage accounts and ship shares into people’s accounts? What’s the mechanism that you typically see at Sidecar?
Nik Talreja (33:43.726)
Typically for IPOs, it’s in kind because most, so in an IPO, if you were to just like sell everything, right, and distribute cash, you’re potentially negatively impacting folks from a tax standpoint, right? That now have to realize a gain, whereas if you in kind distribute, there’s no realizable gain. They can book it whenever they want. Exactly, right? So typically we say in kind. In the private &A space, we’re seeing a lot more cash deals these days. I think because the markets are a little healthier, frothier, whatever you want to call it, and there are certain businesses that are really like sexy for lack of a better word. These are all cash deals. Previously, it was also in kind, but we’re seeing a lot more cash these days.
Brian Bell (34:26.784)
Yeah. What are you excited to build in the next year or two? What’s on the roadmap that you’re excited about?
Nik Talreja (34:37.902)
I’m really excited for us to build for what I think of as our next growth wave, is how wealth advisors are creating opportunities for private clients to invest in startup companies or other assets, whether it’s through SBDs or feeder funds. We’re seeing a lot more activity in this advisory world. where people are getting asked by their clients for access to specific names or types of assets. And they’re not having to put a hat on and think about the private markets more specifically than just shopping a list of large funds like the KKRs of the world and offering just that to their clients. And I think in that world, advisors need to be more educated on the private markets, understand some data and insights about what companies are doing in the private space. And there’s an opportunity for Sidecar as a business to streamline the data and insights around what’s happening in the private markets and offer the advisory clientele structure and services so they can start to direct place capital into private businesses. And that’s something that I think will continue going forward.
Brian Bell (35:45.537)
Yeah, yeah, you guys are uniquely suited right there because you see a pretty large swath of the market, I would imagine. So you have a lot of ground truth there. You know, what is the preferred share of, you know, name your favorite, you know, trillion dollar company like trading at like you have it ground truth right there and a lot of your SPBs.
Nik Talreja (36:04.6)
For sure. Yeah. And there’s a lot of other people doing good work to create narratives around the businesses and otherwise collect data and help people understand what it means.
Brian Bell (36:12.586)
Well, let’s wrap up some rapid fire questions. What’s an operating or compliance mistake you see first time fund managers repeat that is completely avoidable or that you’re able to make them avoid with your platform?
Nik Talreja (36:27.19)
I kind of named the two that I thought of earlier. One is like mismanaging timelines with the founder and with your LPs and having like this like crunch, right around like, hey, people have to get everything done right now or we’re going to lose the deal. Second being having a potential registrar as an investment advisor because he didn’t know what you were doing in the secondary space. And you could have figured it out had you asked some questions earlier.
Brian Bell (36:46.73)
Yeah. What’s your strongest contrarian take about SPVs, syndicates and or emerging managers?
Nik Talreja (36:55.402)
SPVs take over the world. I think that SPVs eat a lot of traditional administration because incentives are aligned on a per asset basis and the retail market will increasingly want to participate in specific assets, not just broad baskets of assets.
Brian Bell (37:12.532)
Yeah, I see a world where like for us, started, it’s in our name, Team Ignite, right? We started as a syndicate and that was always the vision. It’s like, let’s build a large network and scale startups. we were happy to do syndicates. But we noticed three problems with syndicates, which is why we’re glad we have like a blind pool of capital. One was we would get pushed out of rounds, right? Founders would want to syndicate. That doesn’t always happen, but especially at early stage, it happened. Valuations would change, right? So we’d go, you know, raise the 100, 200k and go to wire to the founder and be like, oh, I know I told you a 10 cap. It’s a 15 or 20 cap now. You’re like, well, I just told all my LPs it’s a 10 cap, you know? Oh, sorry, we’re oversubscribed. So, you know, you took a few weeks, three or four weeks to get the money together. Now it’s a 15, 20 cap. I was like, oh, man, I could have had like a 2X markup if I had a fund. This happened a lot. Or the round would close, right? you know, the timeline thing, right? You go raise the money and like, got to wire by Friday, you know, it’s like, okay, it’s Friday, here’s the money. sorry, we close around, you we’re oversubscribed, you know, we’ll stay in touch. And so this stuff would happen a lot. in early stage, it’s really hard to run syndicates, I think, for pre-seed and seed companies, I just ran into this problem. I think it’s a little easier with kind of series A and B and C, and especially the late stage, because you have a little bit more time. you know, it’s like, it’s a priced round. We are closing on this date. What are your thoughts on all that?
Nik Talreja (38:47.544)
think these are challenges that can be solved for with software and services. Let’s take an example of fast moving deals, know, having LPs either store capital to be ready to deploy, right? In some sort of like escrow or a wallet, right? Or a product that allows you to fund immediately and backfill with LP capital, right? These are things that can be solved for. It’s not to say that blind pool funds don’t still have a place. Like I think that. If you as a manager have unfair access and you know, this is a job that you want to do where you raise capital at regular intervals, but not continuously have to chase capital, there is still a really good job there for great managers to like pick, you know, diamonds in the rough. but I do think that’s an increasingly.
Brian Bell (39:31.83)
And it’s a great way to get started. Like if you don’t have track record, then you should start with SBVs, 100%.
Nik Talreja (39:38.094)
For sure. Yeah. Yeah. And I think another thing is it’s hard to raise blind pool funds. Right. So I’m just going to I think it’s going to be increasingly more difficult to raise blind pool funds.
Brian Bell (39:47.863)
pretty hard. The hardest thing ever did it took me two and two and a half years, two and a half years to raise fund two and I had a track record, know, I had you know, 50 investments had a bunch of markups. When I raised fund two back in 2022, it was just pulling teeth, man pulling teeth. Little easier now is on three, I have a public fund three, so can talk about it publicly, but and it’s marked up. So it’s like right at end of the fundraise. I’m so okay, it’s marked up. Do you guys want to invest? It’s a lot easier. But yeah, it’s it’s it’s one of the hardest things I’ve ever done.
Nik Talreja (40:03.918)
Yeah, I talked to our lead investor about that a lot. Yeah, because you’re raising for Brian Bell, right? You’re not raising for an asset. yeah, right, exactly. That’s what you’re asking for.
Brian Bell (40:18.144)
for sure.
Nik Talreja (40:18.562)
Yeah. Give me your money. I know what to do with it. It’s hard. It’s hard. What do you think happens to venture if IPO timelines stay long and they keep getting longer and liquidity stays constrained?
Nik Talreja (40:39.054)
I think we need to solve for liquidity if that happens. And I think that’s what happens is liquidity in private markets becomes, it becomes like an independent asset in a sense that people are investing in more frequently.
Brian Bell (40:53.79)
Yeah. What’s one thing regulators could do that would improve private market liquidity integrity without crushing innovation?
Nik Talreja (41:02.712)
provide some guidance on fees and carry and venture, especially in a secondary space where SPVs are often investing in other funds or SPVs.
Brian Bell (41:13.066)
Yeah, yeah, that’s a good one. What do you think the best venture firms will do differently in five years compared to the last five?
Nik Talreja (41:24.078)
All of these answers are relating to each other and it may sound like I’m not really being creative, Brian, but this is like the best VCs will understand that their LPs want liquidity and there will be a hopefully emerging market for liquidity. So they will pass instead of holding an asset forever because companies never go public. I think they will at regular intervals cater to liquidity and essentially recycle capital more or offer people a way to get their capital back more frequently. than the current model of VC, which is just like hold for 15 years.
Brian Bell (41:54.338)
Yeah. Yeah, and we’re thinking about this right now. We’re sitting on a bunch of unicorns or half unicorns in fund one, I should say. These are four or five, $600 million companies we invested in at 15 and 20 caps. So we’re sitting on a bunch of 30, 40, 50 X things in fund one. doing well. And now we’re starting to think like, OK, maybe. And I’d love to maybe put your LP hat on, and we could just brainstorm how to approach this. Because I’ve probably run the SPV on your platform. it’s cash for you. But should I form an SPV and take that position? Should I tell the LPs in the fund, hey, we’re going to liquidate the entire position and DPI the fund. You can now invest into this SPV if you want to stay along for the ride. Or what percentage of that unicorn should I try to DPI my entire fund? So like maybe 50 %? of one of those positions or like 25 % of all those positions. How do I think about that? That’s something I’m starting to kind of, know, in my fund year four five, I’m starting to kind of have this problem, which is a great problem to have.
Nik Talreja (43:04.768)
I would talk to your biggest LPs and see what they want first and foremost. cause they may have a few. I would be surprised if they said, don’t take anything off the table. I want to stay in this forever. As a fund manager, I think it’s actually in your incentive to take stuff off the table at regular intervals and maybe even return the fund because that cash comes, is presumably going to come back to you because you did good work, right? So it gives you a chance to deploy more capital on the other side.
Brian Bell (43:31.316)
Right. I 1x DPI’d this pre-seed fund after four years. cool. Like, here’s more money. Yeah.
Nik Talreja (43:36.374)
Yeah, and if you more than one X, you get some carry right on that and then you get to you get to redeploy.
Brian Bell (43:41.726)
Yeah, yeah, I’ve been thinking about that. Last question. What’s one belief about how private markets should work that you’re trying to make true through Sidecar?
Nik Talreja (43:56.352)
I’d like to see the private markets look a lot more like the public markets in some ways that I really appreciate the public markets. Transparency, standardization in how information is reported, standardization in how structures are created and how people subscribe to them, which I think leads to more liquidity in the private markets because transfers of like kind stuff is easier than transfers of like everything looks different, right? So I’m excited to contribute to that.
Brian Bell (44:22.442)
Right? Yeah. Yeah, it’s difficult because of all the different Lickpref stacks and all the shares have different classes and different covenants and different side letters. And it is difficult, but it’s something we can aspire to, which is something like a private stock market, right? Where if I want to go buy a share of OpenAI, right? I can go. you know, to sidecar and just see what’s the list price, who’s selling it. Cool, I can just buy that. you know, that would be amazing. And I think it’d be really great for, you know, and it’s private, you know, you have to pass accreditation and stuff like that, because you are, it is riskier than a public market transaction. But I think that would be really, really amazing for the private markets and for liquidity generally for employees and everybody.
Nik Talreja (45:14.83)
For sure. Yeah, think the confusion today is around, I don’t know if like Lick-Pref negotiations will change radically and how companies operate will still be pretty different from one another. But as far as what you hold, like indirectly understanding what that value is today is opaque. I think that can be changed. So even if you’re just buying a share of an SPV later, you know that it represents a certain real value of an asset. And you know what the fee arrangements are along that train.
Brian Bell (45:39.402)
Yeah. Awesome, Nick. Well, I really appreciate you coming on. I learned a lot. Thanks for all the work you do. Thanks for coming on.
Nik Talreja (45:47.63)
Thanks, Brian.
