Successful venture capitalists don’t always begin in the industry. Earnest Sweat, self-made venture capitalist and co-host of the podcast "Swimming with Allocators," is a prime example of this. His journey from investment banking to entrepreneurship and finally to venture capital shows how different experiences can shape a unique approach to investing.

Earnest's career began in the 2007 financial crisis, a period that grounded his investment approach. As an equity research analyst at BMO Capital Markets specializing in Real Estate Investment Trusts (REITs), he mastered data analysis, clear communication with asset manager customers and Fortune 500 CEOs, and learned how to defend an investment thesis.

"As an equity research analyst, writing was a big part of my job. I had to confidently share my investment thesis with the world, fully aware it could be proven wrong in the short term. That experience taught me resilience, a quality I still rely on today."

Earnest’s shift to entrepreneurship was both challenging and enlightening. He was drawn to the way people build networks and set out to create MERIT, Inc., a marketplace for connecting individuals with their ideal mentors. Despite facing the common hurdles of a first-time founder and navigating the lengthy sales cycles of working with municipalities and universities, his passion for entrepreneurship remained.

This drive led Earnest to business school, where he discovered his true calling in venture capital. During an MBA internship in India for a VC, he assessed and invested in tech companies, transitioning from analysis to hands-on action.

“Venture capital is the better version of equity research because I'm getting to make bets–it's not just a recommendation. I'm actually putting skin in the game.”

Once an investor, Earnest’s diverse background laid the foundation for his unique investing thesis. Initially focusing on real estate technology (“prop tech”) through his job with Prologis Ventures, he expanded his outlook to Vertical SaaS which included industries such as commercial real estate, construction, supply chain, logistics, commerce, and retail. This flexible perspective helped him identify key challenges across industries, such as outdated technology, the need for transparency, and labor market complexities. Recognizing these universal challenges, Earnest developed a strong thesis around how product types such as applied AI, marketplaces, middleware, and vertical software can enhance value chains in all industries.

To add structure to this thesis, Earnest has defined three archetypes for what makes a successful founder:

The Humble Outsider: Picture the classic tech expert from Silicon Valley. They spot a problem in a specific industry and dive deep to understand every part of it, surrounding themselves with knowledgeable industry insiders to get the full picture.

The Innovative Insider: This is someone who's been in the industry for years and knows it like the back of their hand. They recognize the need for technology and can clearly define their ultimate goal, drawing in tech talent to create innovative solutions. They balance their deep industry knowledge with a vision for the future.

The Bridge: These are individuals with personal ties to an industry, maybe through family or their upbringing. They blend this insider perspective with a strong technical background from studying engineering. (Earnest is noticing more people like this looking to become entrepreneurs.)

Earnest's background and commitment to consistently learning isn't just the foundation of his investment thesis; it's also what makes him a standout venture capitalist. He's known for providing real value to founders, often connecting them with potential customers or other valuable contacts before making any investment. When considering an investment, Earnest goes deep, understanding the startup's target customers and then introducing the founders to two or three potential leads within his network. Thanks to his extensive connections, he can open doors to new opportunities.

“It's a win, win, win. I get unfiltered feedback, the founder has an opportunity to present their product, and my contact might become a future customer. I’ve seen this as a differentiator for me.”

Everyone’s path to venture capital is shaped by their individual experiences and perspectives. Earnest's journey demonstrates that embracing your unique journey can be your greatest asset in venture capital. He emphasizes the importance of authenticity and self-belief.

"A lot of times you have to trust your own narrative and be the best version of yourself.”

Sydecar has supported Earnest by streamlining his investment process with our SPV product, and we're ready to do the same for you. If, like Earnest, you're breaking into venture capital from a non-traditional starting point, schedule a demo with Sydecar today and let us help you start your VC journey.