Want to invest in startups? Here are 4 ways to get started as a solo GP

Sometimes the nontraditional route leads to the best results. Zach Coelius, the managing partner of Coelius Capital, started out as an entrepreneur. Over the past two decades, he founded a bunch of companies, and after a successful exit from one of those, he fell into the world of angel investing via syndications.

And after some time in that world, his connections led him to VC, but not as part of a group. Organically, Coelius’ connections and reputation let him function as a solo general partner (GP).

In this column, I’ve compiled nuggets that Coelius shared with me about his experience in getting his foot in the door, as well as how to leverage favors and the strategies he’s found most useful as a solo GP.

Focus on founders first

If you want to become a VC, you’d better ingratiate yourself with some VCs, right? Not necessarily, Coelius says.

The problem is that most entry-level investors go to VCs first. But unless you’re a VC’s best friend, they’re probably not giving you good quality deals. Investors are keeping the best deals for themselves, and unless you have a sizable chunk of change to kick in, you probably won’t have access to the cream of the crop.

Don’t have a trust fund or riches from a successful exit ready to spend? Coelius has a better — and cheaper — suggestion: Make friends with founders. Then help them out.

This requires lots of networking, but if you can bridge the gap between founders and VCs, you’ll be doing the founder a big favor. And if you’ve been helpful at a critical time, you’re more likely to reap the rewards and get included in the deal.

But don’t make it a quid pro quo. No one likes being bound by a strict agreement. Instead, it’s more of a “you get what you give” situation. Founders don’t want to feel like you’re pinning them down, so keep it casual.

This leads to his next big tip: