A Data-Driven Guide to Portfolio Construction

Introduction

Building a durable Fund I portfolio requires equal parts vision and execution. While institutional funds may prioritize growing assets under management (AUM), emerging managers must focus on refining their strategy, validating their model, and establishing trust with LPs. Despite their lower AUM, the stakes for emerging managers are high. Fund I managers face the same pressure as their more established peers: to deploy with conviction, move efficiently, and show results.

We analyzed a dataset of Fund Is on Sydecar’s platform, looking at investment cadence, thesis, check sizes, and timelines. The dataset includes funds ranging from $200,000 to $50M that were raised between January 2023 and June 2025.

What we found reflects both the constraints and creativity of Fund I construction and offers benchmarks for anyone building their own portfolio model.

Fund I deployment strategies tend to favor breadth over reserves

On average, Fund I managers on Sydecar deploy capital over a three-year investment period and are making an average of 8 deals per year, putting them on track for ~24 Fund I investments. While every portfolio is different, this deployment strategy aligns with what many emerging managers consider a balanced approach: broad enough to diversify early-stage risk, concentrated enough to maintain high conviction.

What’s more is that only 8% of Fund I committed capital on Sydecar was allocated to follow-on investments. This suggests that Fund I managers appear to prioritize initial checks, reserving little capital to deploy into existing portfolio companies. Instead, follow-ons are increasingly happening through SPVs rather than inside the fund. This approach gives managers flexibility to double down on breakout winners without disrupting the fund’s investment cadence or concentration strategy.

Co-investments offer a flexible lever for scaling exposure

To increase exposure to select portfolio companies, many Fund I managers turn to co-investments. On Sydecar, 16% of Fund I portfolio deals included a co-investment SPV, meaning the manager used both committed fund capital and a sidecar vehicle to participate in the same deal.

That translates to roughly 1–2 co-investment opportunities per fund per year. These are selective opportunities to increase exposure to high-conviction companies. They also help managers invite new LPs into the ecosystem or offer existing LPs more allocation in winners: a relationship-building tool as much as a capital one.

Fund I managers gravitate toward early-stage deals

Nearly two-thirds (65%) of Fund I deals occur at the pre-seed or seed stage. The average check size is $209,000 across pre-seed and seed deals, with a noticeable jump to $1M across Series A and B. Pre-seed and seed deals average a valuation of $16.3M, while Series A deals average $35M, more than double.

Additionally, 58% of Fund I deals on Sydecar are executed using SAFEs. SAFEs are a financing instrument that offer a lightweight alternative to priced rounds, enabling faster closes, cleaner ownership paths, and more flexibility when leading or moving quickly.

Altogether, the data reinforces what we see across the platform: Fund I activity is concentrated at the earliest stages where valuations are lower, check sizes are smaller, and managers are positioned to lead, support, and differentiate.

Faster execution can accelerate DPI and signal strength to LPs

While portfolio construction is often framed in terms of diversification and deployment, timing is the hidden variable that affects nearly every downstream outcome. The faster you can execute, the faster you can call capital. Once capital is called, the DPI clock starts ticking.

On Sydecar, standard SPVs take a median of 41 days to close. But co-investment SPVs tied to Fund I deals close in just 31 days on average, a 25% faster closing time. In competitive rounds, execution speed helps managers secure allocation. With founders, it builds trust. And for LPs, it signals that you're operationally ready to act when conviction hits.

Execution speed won’t necessarily show up on your pitch deck, but it shapes how quickly you can deliver results when it counts.

Final thoughts

Your Fund I model is a blueprint for how you’ll operate. It reflects your thesis, your risk appetite, your investor relationships, and your capacity to execute. Whether you’re building from scratch or refining what’s already in motion, the patterns we see across Sydecar point to a few consistent truths:

Most managers favor early-stage exposure, with small checks and lean teams
Rather than keeping reserves in the fund, many managers are opting to run follow-ons through SPVs
Deployment strategy and execution speed both play a role in long-term outcomes
Flexibility is equally as important as discipline in what separates thoughtful fund construction from rigid modeling

These benchmarks offer a starting point, but don’t mistake them for a formula. The best Fund I models evolve alongside your experience, your LPs, and your conviction. If you want to go deeper, watch our recent webinar on portfolio construction for practical insights from emerging managers and LPs:

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