Prota Ventures was founded in 2018 by a team of ex-founders who were passionate about providing the support to the next generation of startups at the earliest stages. They’ve come a long way over the past five years, building a portfolio that boasts several unicorns, a reputation of a high caliber, and now with the goal of launching their first fund.  

As repeat founders themselves, Prota’s competitive advantage lies in their ability to identify strong leaders. They know that subject matter expertise doesn’t always translate to strong leadership skills – and a lack of strong leadership is one of the primary reasons that startups fail. 

Prota approaches their portfolio with a multi-pronged approach and seeks to support founders in a customized manner. They run an incubator, a startup lab, and a traditional venture capital fund and take a hands-on approach to helping founders navigate changing needs as they grow. Their portfolio includes companies like Figment, Stix, and BirdBuddy. 

For close to five years, the Prota team has built a compelling track record through their SPV investments. This strategy acted as a proof of concept – an opportunity to test their thesis and share their decision-making process with LPs. With several breakout companies in their portfolio, there’s no question that Prota has proven their concept. At the end of last year, they set out on the path to raise their first fund, with a focus on formalizing their processes around diligence and deal execution.

Establishing a Track Record

Prota started out operating as a partnership and syndicating their investments using SPVs. The partnership would invest and find other investors who join on individual deals. Given the work of coordinating and collecting information, SPVs were getting unwieldy, so Prota turned to Sydecar. 

It was important to find a tool that would complete investments quickly and for a variable price that could flex with each investment, given the size and stage of their investments.

“Once we started using Sydecar, we closed deals five times faster than our previous manual workflow allowed. On the average, a deal would take almost a month and a half to close. Now we're able to do it within about a week.” - Gary Raju, Fund CFO

Starting with an SPV strategy allowed Prota to prove out their ability to source high quality deals, diligence appropriately, and collect commitments to fill allocations. The track record that Prota established through syndicated investments has helped them build relationships with investors and demonstrate the value of their approach, setting them up for a successful fundraise.

Launching a Formalized Fund

When making the transition from SPVs to fund management, the Prota team knew that they needed sophisticated processes. A larger pool of capital to deploy meant more LPs to keep track of and more founders to support. They needed to operate more efficiently and spend less time keeping track of who has signed fund agreements, who has sent money, and who has access to documents. They also knew that they needed to prepare for a potential audit when raising funds from institutional investors.

With these goals in mind, Prota turned to Sydecar’s Fund+ product. Sydecar’s platform allows Prota to handle everything from LP onboarding to commitments to K-1s in one place. It acts as a one-stop shop to raise and manage their fund and their investors. The Fund+ product also provides a document center where Prota can streamline communication with LPs during the fundraising process.

“Sydecar gives us real time visibility into all of our our capital commitments and capital call schedules. We love having a document center where every single deal and every single document is easily accessible. We’ve spent significantly less time managing spreadsheets and email threads as compared to our previous fundraises.” - Gary Raju, Fund CFO

Cultivating trust with investors is top of mind for any emerging fund manager. They’re tasked with the challenge of inspiring confidence in their experience, their investment strategy, and their ability to execute. Especially as they raise from new investors, there is a higher demand for organization and clear processes. Prota knows that their fund provider can either contribute to building that trust or detract from it. They saw in Sydecar not just a product that would allow them to operate more efficiently, but a team that would act as an extension of theirs and inspire trust with investors of all types. 

Summary

Prota has grown from a friend group of ex-founders to an incubator and fund by leveraging the experience of their founding team and working with founders early. After building a strong track record through their labs and SPVs, they are now raising for a new fund with the goal of a more formal process. With the support of Sydecar, Prota is able to raise and manage their fund on a product that both their team and investors love.