Litquidity Ventures’ Take on SPV Investing

What motivated you personally to get started in private investing?

I’m motivated by unmitigated curiosity — I want to be a part of everything. I grew up surrounded by entrepreneurs and was encouraged to try my hand at everything that interested me. In college, my curiosity ultimately drove me to graduate early as a quadruple-major, study entrepreneurship in India, launch a “Wine-for-Dummies” startup, and even work a short stint as a professional stunt actor.

Graduation presented a dilemma: my co-founders opted to put our startup on hold to explore other opportunities. While I weighed my options, a mentor of mine encouraged me to consider an alternate route to investing: going to law school. As an aspiring VC, it sounded like heresy — I even titled my application essay “I Don’t Want to Be A Lawyer”. Ultimately, I decided to follow in the footsteps of many investors and founders I admired — John Doerr, Peter Thiel, Brad Feld among others — and began my career in Mergers & Acquisitions at Skadden Arps.

Skadden equipped me with resilience and deep familiarity with running a deal process, but I felt far removed from the entrepreneurs and principals we advised. Even the bankers were closer to the investment thesis than the lawyers. I distinctly remember one late night on a particular deal — PayPal’s $4B acquisition of Honey — where I felt more akin to the founders of the acquisition target than to our big-tech client.

So, like college, I expanded my “major” beyond law. My curiosity drove me first to investment banking to deepen my understanding of deal economics and financial modeling. After that, I worked as Chief of Staff at a venture-backed fintech startup, where I took on a wide range of operator roles. I started angel investing on the side and founded a digital media brand that led to a collaboration with Litquidity. After trading ideas for a long time, we started investing together in 2023, and debuted as a partnership in 2024.

How does your investment approach through SPVs set you apart in the competitive landscape of private investing, and how do you intend to capitalize on these strengths to achieve your investment goals?

Specializing in SPVs allows for a tailored approach to each deal, aligning the right investors with the right targets. Our investors are ultimately members of the Litquidity audience – which commands a uniquely strong influence. The inherent flexibility of SPVs allows us to connect founders and sponsors with a diverse LP network: ranging from investment banking analysts and junior law associates, to HNWIs, family offices and institutional investors.

It is just as easy for us to fund a consumer fintech startup via an embedded network of finance professionals as it is to connect a strategic sponsor for a leveraged buyout of a professional soccer club. Both scenarios are a natural fit for Litquidity Ventures. We are not encumbered by structure or asset class. Such focused, direct distribution represents an immense value-add to early-stage founders.

What makes an investment opportunity irresistible for you? Can you share some key insights on your investment thesis?

I don’t believe any investment is ever truly “irresistible”. Early-stage investing is inherently betting on an out-of-the-money option. Many investors cite Louis Pasteur’s adage that “chance favors the prepared mind”, and that includes being prepared to say ‘No’, even when it could be fun to say ‘Yes’.

My personal investing theme could be described as a “Flight to Authenticity”. Much has been written about the American “vibe shift”, which describes a transformation in societal sentiment challenging stagnant narratives and embracing a fresh, human-first paradigm. A veil of consumer cynicism had emerged as a confluence of (1) saturation in the current hype cycle, (2) an imminent deluge of fake and generative content, (3) rising institutional skepticism (see: pessimism) among emergent consumers, and (4) a technical hangover in the wake of the crypto craze. 

A new generation of builders & products are piercing that veil. We’ve witnessed the huge renaissance in hard tech, a historical leading indicator for a subsequent wave of consumer applications. These trends are creeping across the consumer chasm (see the rise of Tesla), and we’re seeing early signals among digital-enhanced experiences and new social applications. The American geo-political-techno landscape is uniquely poised to produce rugged, genre-defining companies from this new innovation Reformation.

How would you define portfolio success beyond economic return?

Our fiduciary duty as capital allocators is first to our investors. However, a portfolio curated in pursuit of a truly exceptional thesis creates a flywheel effect with compounding third-order effects to the entire ecosystem. One look at the Litquidity Ventures portfolio is clear to see how we and our companies mutually benefit from the Litquidity reach.

What measures do you take to mitigate risks associated through SPVs, especially in the context of social media exposure?

Risk mitigation involves a multifaceted approach: comprehensive due diligence, strategic legal frameworks, and proactive reputation management, especially in today’s digitally connected world. Our syndicate was built on the back of trust earned with a captive audience. Offering successful SPVs is an extension of that trust – one we buttress with constant communication, transparency, and partnering with best-in-class administrators to create a seamless experience. We conduct a thorough vetting process on each deal, building a relationship with founders, testing our theses, and preparing thoughtful discussion materials to get our investors as comfortable and excited as we are

Can you elaborate on any unique challenges you’ve faced when operating within the intersection of social media influence and investment management through SPVs?

A unique disparity forms between serving a social media-founded syndicate and investing from a strong thesis. We’ve built deep conviction over certain investments that were simply too dense for our investors’ appetites. Our investors are sophisticated, but they’re busy people. SPV-native syndicates are inherently limited by the means of communication. Our investors don’t sit on an Investment Committee. If our cover memo for a given investment isn’t immediately interesting, then we are unlikely to build the requisite momentum to move forward meaningfully. We joke that we’re forced to prioritize “sexier” deals in our pipeline (i.e. pro sports, consumer, e-commerce) over projects requiring deeper conviction and understanding (deep tech, infrastructure, AI).

In a related vein, some founders understandably balk at SPV structures as a rule. We’ve had situations where, after we’ve secured cap table allocation, a founder has subsequently withdrawn once they understand the deal is syndicated.

Sometimes we can educate the founder, but it engenders unnecessary hesitation. To meet this challenge in coming years, Litquidity Ventures will expand to offer multiple investment strategies to best serve our investors and un-hinder our ability to pursue those founders who are best poised to change the world. A dedicated co-investment fund will likely be the easiest way to address most of these issues in the immediate future.

Could you share the best investment lesson you’ve learned during your career?

Trae Stephens at Founders Fund is a mentor of mine (though admittedly, I’ve never actually met him). He spoke about the importance – and rarity – of truly adopting a contrarian investment approach in venture. It’s impossible to deliver outsized returns when every investor agrees on the thesis, the founder, the problem. It can be challenging, but we have to be prepared to walk away from competitive auctions and oversubscribed rounds.  If alpha exists in early-stage investing, it comes from the deals that appear the most resistible on their face, but beget some fundamental misunderstanding. 

Mark Twain said “Whenever you find yourself on the side of the majority, it is time to pause and reflect.” As emerging managers and syndicate leaders, we are especially careful to avoid the momentum-carrying side of a hype cycle.

What’s your favorite non-business interest or hobby? We’d love to know a bit more about your personal side.

Karaoke. When I was living at SpaceX’s Starbase location in Texas, my sister introduced us to this local watering hole in a strip mall off the freeway in Brownsville. It’s literally called “The Bar”. They had these huge, overproduced Monday karaoke nights with a massive stage and lights. A bunch of SpaceX’rs went every week, and after a while the performances got competitive. Folks started going out of the way to practice new numbers at other karaoke spots during the week. We invested in a home set. It’s become my favorite activity to perform with a group when making evening plans, in any city. Besides that, I play rec league basketball, run marathons, and do missions trips with my church.

Please leave us a book recommendation. 

Tough question! I’m an active reader, and manage both an in-person book club in LA and a virtual book club on Instagram (@professionalreading). I read a lot of business books, but I find them to be only situationally helpful. Fiction and novels resonate more profoundly. Last year, I devoured Three Body Problem and The Wager. I highly recommend that folks consider re-reading a book if you haven’t recently, especially a work of fiction they read in their youth. I subscribe to C.S. Lewis’s sentiment that “No book is really worth reading at the age of ten which is not equally (and often far more) worth reading at the age of fifty.” It’s important to return to our first inspirations and stoke that sense of wonderment.

On a scale of 0 to 10, what’s your take on the private market overall?

9.9