One GP of a large fund said, “Venture capital is legal insider trading.” That's true; in private markets, the most valuable thing is information asymmetry. Are your social connections strong enough to get you into a good deal that is being put together in stealth mode?

What we know about syndicates: groups of people who have come together to make joint investments. In a classic syndicate, there is a strong leader who has their own pipeline of deals and shares them with the rest of the syndicate. Smaller investors join to follow the syndicate leader's strategy.

In next-level syndicates, participants generate deals themselves. Everyone can contribute a deal, put it on display when it has been sufficiently developed and analysed. Such groups are not centred around a leader, but are organised according to a network principle — each link shares its pipeline, expertise, and social capital. In this case, the flow of deals becomes more varied and interesting.

But what if I told you that even the most significant funds with hundreds of millions and billions in AUM play the same game and form informal meta-syndicates? They recognize the value of the “right” investor in their portfolio startup. They understand that the stronger the cap table, the better the odds of the portfolio company's success. One will make a warm introduction to the CEO of a top corporation, another will assist with key employees for growth into a unicorn, a third will bring in a client worth millions of dollars, and a fourth will enhance the company's PR through their resources.

This is the recipe for a unicorn. That's why Sequoia is happy to share the table with a16z — they are not competitors; on the contrary, each significantly multiplies the chances of a portfolio startup's success. That's why they share their deals among themselves, forming an informal meta-syndicate. The founder doesn't even have to create the best product on the market. Still, the fact of investment from big-name investors is in itself a social elevator — the asset becomes more attractive to other strong investors, customers, partners, and employees.

Moreover, with the development of AI, the need for startups to have a whole set of smart-investors is only growing — now startups also compete with strong corporate AI that quickly copies them and doesn't even give many projects no time to grow, often undermining them with regular updates to its models. The market has become more challenging for founders; it's no longer enough to develop a good product — you need to gain a critical mass of users or data before Google AI Studio copies you. The significance of resources beyond just money that investors can offer is growing.

It is also critically important for GPs to have common portfolio companies with stronger funds — this not only helps a particular startup, but also unites it with the GPs of such funds around a common subject of interest, opens the door to the circle of more “powerful” market sharks, and provides a chance to get into other good deals with them.

The best deal has two criteria:

1. You are not expected to be in it, but you ended up in it.
2. It was brought to you in private messages marked as confidential.

Both parameters are only possible when you are part of that very meta-syndicate formed by other funds. They share a good deal with you so that next time, you will share a deal like this with them.

The only problem is that this story is very unorganized. You need to live in the same tent at Burning Man and go yachting twice a year with other GPs from this informal group to stay in the loop. If you skip the yachting or decline a few deals, you're no longer considered part of the inner circle because such a meta-syndicate has no formal obligations, only personal relationships. It's too easy to join or leave at will.

a16z gained prominence through a strong PR machine. They put venture capital into the spotlight, made it part of everyday life, and saw the benefits. Now, every other fund is copying what a16z did to become a household name. But that approach won't work anymore. To break into tier-1 funds now, you need to do something different — something no one else has done before. The next major player will likely be the one who can systematize the meta-syndicate model and turn it into a sustainable structure.