Episode SummarySidecars have gone mainstream. Once something mostly associated with larger venture funds, they’re now increasingly common in Australia, with emerging managers using them alongside their first funds and sophisticated LPs increasingly expecting access to them. But what exactly is a sidecar, and why would you use one instead of simply investing directly? In this episode of First Track, Cheryl and Maxine break down sidecars from the ground up: how they differ from co-investments, why LPs use them to double down on companies they’re excited about, and how lower fees and carry can make them attractive to larger investors. They also unpack the less obvious reasons fund managers use sidecars—from getting more capital into high-conviction companies and giving venture-curious investors a way to get reps, to preserving pro rata in follow-on rounds without changing the core strategy of the fund. The conversation gets into opportunity funds, the history of sidecars, and why a vehicle that was once niche is now a standard part of the venture fund playbook. They also dive into the surprisingly complicated world of Australian SPVs, the four main structures available, and the regulatory challenges facing super funds investing in venture. Finally, Cheryl and Maxine look at how the venture ecosystem is evolving, why sidecars are becoming part of the progression from syndicate to fund manager, and what the growing expectations of institutional LPs could mean for the next generation of Australian funds. Time Stamps00:00 – From venture outsider to “everyone is building companies” 01:12 – Why sidecars have suddenly gone mainstream 02:23 – What exactly is a sidecar? 03:14 – Sidecars vs. co-investments 04:12 – The Uber for Cats problem 🐈 05:12 – Why LPs and fund managers use sidecars 05:40 – Doubling down on the companies you love 07:27 – How sidecars can lower fees and carry 08:40 – The paradox of picking winners to average down fees 09:29 – Why sidecars make more sense at growth stage 10:30 – Drafting off someone else’s diligence 11:30 – Follow-on sidecars and pro rata 13:31 – Why competitive rounds make sidecars valuable 14:50 – The admin headache of investing directly 15:05 – Why sidecars can make investing easier 16:02 – The surprising history of opportunity funds 17:25 – When should emerging managers start using sidecars? 19:10 – Why fund managers run sidecars 21:00 – Sidecars, carry and staying disciplined 22:00 – Why sophisticated LPs increasingly expect sidecars 23:10 – SPVs aren’t actually a legal structure 24:10 – The four main Australian SPV structures 25:23 – Why Australia is different from the US 26:00 – The evolution from angel to syndicate to fund 27:08 – The super fund fee problem 28:17 – Should venture be treated differently? 29:11 – The regulatory challenge for Australian venture 30:24 – What happens as Australian funds mature? 31:23 – Why building a fund is still building a company 32:01 – Sidecars 101: did we cover it all? 32:49 – Send us your sidecar questions Sponsors:First Cheque is supported by our wonderful sponsors:Deel: Global hiring and payroll can be a headache. 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