Backing independent sponsors on a deal-by-deal basis is more than an investment strategy; it is an extended due diligence process. This approach provides deep, real-time insights into a manager's problem-solving skills under pressure, offering transparency that is impossible to achieve before a Fund I commitment.

To ensure robust decision-making, Eclipse requires that if a partner feels strongly against a potential investment, they must join the deal team alongside the champions. This forces a direct confrontation of the risks and ensures that by the time an investment is made, all major concerns have been addressed.

To source proprietary hybrid capital deals, avoid the capital markets teams at PE firms, as their job is to minimize cost of capital. Instead, build relationships directly with individual deal partners in specific industries. This allows you to become a trusted, go-to provider for complex, time-sensitive situations where speed and certainty are valued over price.

Unlike committees, where partners might "sell" each other on a deal, a single decision-maker model tests true conviction. If a General Partner proceeds with an investment despite negative feedback from the partnership, it demonstrates their unwavering belief, leading to more intellectually honest decisions.

Analyzing past failures, TA found that deals approved by lukewarm Investment Committee (IC) members led to poor outcomes. They now require enthusiastic IC support and add approved deals to the IC members' personal track records. This system aligns incentives and prevents conviction from overriding caution.

For data-less decisions, PhonePe's co-founders have a simple rule: the partner with deeper historical strength in that domain makes the final call. The other commits fully, and they never revisit the decision, ensuring they learn and move forward without blame.

Large, contrarian investments feel like career risk to partners in a traditional VC firm, leading to bureaucracy and diluted conviction. Founder-led firms with small, centralized decision-making teams can operate with more decisiveness, enabling them to make the bold, potentially firm-defining bets that consensus-driven partnerships would avoid.

Over 80% of TA's investments are proprietary deals with founders who aren't actively selling. Their strategy focuses on convincing profitable, growing businesses to partner to accelerate growth, framing the decision as "partner with us" versus "do nothing." This requires a long-term, relationship-based sourcing model.

A16z's growth fund avoids traditional investment committees, which can lead to politicization and slow decisions. Instead, it uses a venture-style "single trigger" model where one partner can champion a deal, encouraging intellectual honesty and speed.