Welcome Back to The Cap Table Newsletter!
This week, I am talking about something I am currently going through - trying to get allocation in a high-profile deal.
If you're an investor, you've fought for allocation at least once (probably 20+ times) in your life and know exactly what I am talking about.
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Chasing Allocation in Erebor: My Playbook (and What I’ve Learned So Far)
Every angel investor has that one deal they can’t stop thinking about. For me right now, it’s Erebor - the new digital bank founded by Palmer Luckey (Anduril) and Joe Lonsdale (Palantir, 8VC).
This isn’t just another neobank. Erebor is applying for a national charter with the goal of becoming the default banking partner for the innovation economy... the spot left vacant after SVB’s collapse. It’s aiming to serve AI companies, crypto firms, defense startups, and manufacturing ventures. Even more ambitious, it wants to hold stablecoins on its balance sheet and call itself “the most regulated entity facilitating stablecoin transactions.”
The backers? Founders Fund (Peter Thiel), 8VC (Lonsdale), and other big names. Erebor is playing at the intersection of fintech, crypto, defense, and politics. And naturally, everyone wants allocation.
Here’s the playbook I’ve been running to try to get allocation and what I've learned along the way.
Why Erebor Matters
First things first... Timing: SVB left a massive hole in the startup banking ecosystem. Startups and VCs still need a trusted banking partner.
The Team: Luckey has already built a multi-billion-dollar defense company (Anduril). Lonsdale helped create Palantir and now runs 8VC. These aren’t first-time founders learning on the job.
Market: Serving venture-backed startups + defense + crypto is a niche, but a lucrative one. And unlike challenger banks, Erebor wants to be fully regulated.
Regulatory Edge: Their fundraising memo highlighted Luckey’s political ties and Erebor’s “unique connectivity” to regulators like Comptroller of the Currency Jonathan Gould. That’s a moat most startups could never dream of.
This is the kind of deal where allocation is scarce by design. I mean we are talking about Joe Lonsdale and Palmer Luckey coming together to build the start-up bank of the future.
My Playbook (So Far)
Step 1: Cold DM the Founders ❌ Messaged Joe on LinkedIn with a note. Tried Twitter. No luck. Palmer? Even tougher to reach. Cold outreach to billionaires rarely converts.
Step 2: Email Outreach ❌ Sent some cold emails. As expected, nothing.
Step 3: Team Member Outreach ❌ It is a very early-stage start-up, and keeping most of their information currently on the DL
Step 4: Check Mutuals ✓ I mapped mutual connections. Found a few broad overlaps, but not the kind of “done deals together” relationships that actually open doors.
Reality check: when two of Silicon Valley’s most connected founders raise, the standard playbook doesn’t cut it.
What are my Next Steps...
The Warm Intro Game Map mutuals by proximity, not just LinkedIn overlap. Who’s actually done business with Luckey or Lonsdale? Those are the people worth asking and when you do, you need to lead with the value you can bring.
The LP Backdoor I know a few people who were early into LPing in 8VC and also Anduril... sometimes you need to ask for a favor
The Secondary Play Early employees sometimes want liquidity. Sadly for this company, it is too early to go this route, but maybe something to consider for the future
The Strategic Angle Money is a commodity. Value is not.... “I want to invest” it is “I have 10 enterprise customers who’d switch their payroll to Erebor on day one” and honestly, I probably do
The Long Game Invest in their other portfolio companies. Build the relationship before you need allocation. By the time the next Luckey or Lonsdale deal comes around, you’ll already be on the list.
Why It’s So Hard (and Why That’s the Point)
Erebor isn’t raising to fill the cap table with random checks. They’re being deliberate: limiting investors, prioritizing strategic value, and leaning on their existing networks. That’s why cold DMs don’t work.
But that’s also what makes chasing allocation here a valuable exercise. Every failed attempt teaches you how the real allocation game is played: through networks, value-add, and persistence.
The Big Question
I’m still working on my inroads to Erebor. But here’s the question I’ve been asking myself and now I’ll ask you:
What’s your unique angle?
Because in deals like this, capital is the least interesting thing you can bring.
The Second Big Question
Do any of you have a way to get allocation into Erebor?
Worth a shot!
That’s all for this week. Next time, I am thinking of sharing a breakdown of what to actually do once you secure allocation - how to evaluate whether the deal is worth your dollars, and how to avoid overpaying for hype.
Until next week, Elana ✌️
👋 That’s all for now friends! See you next week.
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Disclaimer: The Cap Table DOES NOT provide financial advice. All content is for informational purposes only. The Cap Table is not a registered investment, legal, or tax advisor or a broker/dealer.