A syndicate pools capital from a variety of investors into an LLC that invests in the startup alongside the syndicate lead.
Syndicate leads access $450M+ in institutional capital and thousands of sophisticated individuals ready to back deals. Leads earn carry in exchange for providing access. Carry can multiply returns by 5x or more.
AngelList handles everything through the lifetime of the syndicate, including taxes, documents, accounting, legal, and liquidity events. AngelList charges 5% carry on deals done through the platform (waived in select instances).
Syndicate leads earn carry on the primary investment and any subsequent follow-on investments.
All new leads are assigned an account manager. You can always go to this person with questions.
Ask a founder for an allocation for you and your syndicate.
Tell founders that you need to consult with your LPs before committing to an allocation size. You can provide a range if needed.
Send the deal to your AngelList account manager before formally submitting. We'll give you a soft answer including a recommended allocation size within 3 business days.
If your deal does well on AngelList, you can always increase the allocation (with the permission of the founder).
The lead then shares information about the opportunity. AngelList and the lead invite prospective investors, including the AngelList-affiliated funds, to a private deal environment.
You don't need your own backers to run a syndicate deal. The funds represent $450M+ in capital and invest $50-500K per deal. AngelList helps you build your backing over time.
Investors make decisions within a set time period (usually 3-10 days). Deal documents get signed and funds are collected and wired to the startup.
Many leads set up a Q&A conference call between prospective investors and the startup founder; these have historically helped drive more capital into the syndicate.
AngelList investors look for specific criteria when deciding whether to invest. You can contact your account manager to better understand whether a deal is suitable.
There should be a reputable angel or VC participating or leading the round. They should be making a significant, new investment in the company. See examples
The company is in the lead’s area of expertise.
Generally avoid retail, content, CPG, gaming, or pure e-commerce businesses.
Disclose conflicts, such as owning advisory shares or having relatives at the company. Investors may have a higher bar in such cases.
Bridge / extension rounds
The company should be gaining at least 12 months of runway from the round.
AngelList helps connect leads to multiple capital sources.
Several funds rely on AngelList entirely for their deal flow. These include CSC Upshot Ventures, Maiden Lane Ventures, e-merge, and several AngelList-operated funds. These funds represent $450M of capital dedicated to investing behind syndicate leads.
A small batch of investors that invest over $50K per month on AngelList. All investors in this category are under confidentiality agreements.
Over 20,000 accredited investors also make investments on AngelList; most have deep experience in the technology sector and can add value to portfolio companies. AngelList can help leads source value-add investors in nearly any industry.
All deals are private by default. Leads choose which backers to invite to deals. Most deals are done with fewer than 20 backers; some are done with the AngelList-affiliated funds only. Here's a distribution of backers per deal:
AngelList may suggest featuring a deal to the broader investor base in order to drive more capital to the syndicate. This is only done with the lead's approval. Leads and founders can block specific users to avoid sharing information with competitors.
When an investment becomes liquid, AngelList pays a share of the investment's profit to the lead. Leads typically charge 15% carry. AngelList's standard carry is 5%.
If you negotiate pro-rata rights with a startup founder, you can earn carry on investments made by backers on follow-on rounds. Leads earn their full carry on these rounds as long as they invest their full pro rata allocation.
Syndicate leads can reduce or waive their carry on an investor-by-investor basis. Also, investors you bring to the platform pay the carry you negotiate and AngelList will waive its usual carry as long as the average carry to AngelList is at least 2.5%.
Carry sharing enables you to build a group of value-add advisors for each deal you syndicate. This can help you win competitive allocations.
For example, a syndicate can award carry to:
Each of the links below is an interview with an active syndicate lead discussing their angel investing philosophy and how they use AngelList.
|Jake Seid, active syndicate lead and former MD at Lightspeed Ventures|
|Dave Eisenberg, active syndicate lead and VC at Red Swan Ventures|
|Pascal Levy-Garboua, active syndicate lead|
|Zach Coelius, investor in Cruise and Branch Metrics|
|Brendan Wallace, investor in Clutter|
|Tikhon Bernstam, investor in Cruise|
|Jenny Rooke, investor in Caribou Biosciences|
|Mike Jones' syndicate deal for Dollar Shave Club ($1B exit)|
Each syndicate is an LLC created to make a single investment (SPV). The fund is managed by Assure Fund Management. The fund is typically advised by AngelList Advisors, which is wholly-owned by AngelList. Leads become special members of the LLC and receive carry.
Syndicate leads must: