3 Things Founders Will NEVER Hear From a Solo GP
Founders taking capital from a solo GP can avoid these downsides of taking capital from a larger VC firm.
When pursuing VC investment, many startup founders assume that working with a larger venture capital firm - with its many partners and resources - will bring the greatest success. However, a large VC firm can present some surprising challenges that founders would never experience with a “solo GP” (a single decision-maker VC firm, see also NBT’s post on “solo capitalists”).
Let’s dive into the 3 things you’re likely to hear from a larger VC - but never a solo GP - that can spell disaster for an early-stage startup:
1) “Sorry, I just couldn’t get approval for the investment.”
When a founder pitches a junior partner at a larger VC firm (let’s use a 10-partner firm as an example), it’s quite common for partner at a big firm to overcommit early in the pitching process, presenting the facade that the firm is all in. In reality, a junior partner still needs to win over their nine other partners—each of whom has different motives, career progressions, and sometimes even competing priorities. The result? Founders are left grappling with the disappointment of rejection after being led to believe the deal was nearly done. I’ve personally witnessed this too many times as it is so disruptive to both the business and a founder’s mindset.
In contrast, when a solo GP is excited about your startup and says, “I want to do this,” - that’s it! It’s a done deal. There’s no need for further approvals or building consensus across multiple stakeholders. There are no fragile, vacillating decision-makers—the decision is clear.
2) “I *think* that’s OK, but let me discuss it with my partners.”
After securing an investment with a larger firm, founders often expect to hit the ground running - but not so fast! Now every major company decision has an element of approval from the 10-person committee at that larger VC firm, leading to numerous discussions and delays that can slow down the startup’s progress at the most critical moments.
With a solo GP, decision-making is swift. They not only have the legal power to make decisions autonomously but also the depth of experience to act confidently. Solo GPs also have a clarity of incentive that can’t be matched at a larger firm. Unlike wading through the murkier incentives of a 10-person committee, the solo GP’s incentive is purely economic, which benefits both them and the founder: “If you do better, I will do better.” This alignment of interests, combined with the solo GP’s agility, benefits founders by reducing delays and allowing for faster execution.
3) “Let’s find time to discuss next week.”
Larger firms often lack the urgency that fast-paced startups require. With multiple partners and layers of approval, it can take a week or more to even schedule a discussion, let alone make decisions.
On the other hand, solo GPs - whose necks are on the line for every decision - always operate with a sense of urgency and a bias for action. For them, the knife is sharper: the issue is either worth talking about now, and the solo GP will make themselves available within the next 60 minutes to have that conversation, or it’s not worth talking about at all. This responsiveness is a game-changer for early-stage startups, where quick, smart decisions can mean the difference between success and failure.
While a large VC firm might seem attractive due to its resources and team size, it’s important to remember that more people often means slower decision-making and diluted incentives. With a solo GP, you get decisive action, speed, and a direct alignment of interests—setting up both the founder and the investor for success.
Ubiquity Ventures — led by Sunil Nagaraj — is a seed-stage venture capital firm focused on startups solving real-world physical problems with "software beyond the screen", often using smart hardware or machine learning.
If your startup fits this description, fill out the 60-second Ubiquity pitch form and you’ll hear back shortly.