View from Seed

FEBRUARY 23, 2021

For early stage VC ‘s, Syndication is the process of sharing investments with other potential co-investors. The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor. When I started in venture, syndicating deals was fairly common.

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Syndicate Syndication Term Sheet Cofounder 207

View from Seed

JUNE 11, 2019

At this point, founders find themselves in a luxurious situation of being able to build the best possible syndicate. Here are a couple tips and suggestions on how to go about creating the most supportive investor base for a typical institutional seed round. Get early commits to start generating momentum. So too few is not great.

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Syndicate Syndication Seed Stage Lead Investor 202

Genuine VC

JULY 10, 2012

There are essentially two distinct basic strategies for startup entrepreneurs to raise a seed round of capital: Subscription approach – An entrepreneur sets a structure (usually a convertible note) and recruits individual angel investors who subscribe to the round, all without a term-driving lead investor.

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Syndicate Syndication Seed Stage Portfolio 207

Both Sides of the Table

JULY 7, 2015

And from Nancy Hua … “Too many angels can also hurt a start-up and be taken as an indication that a company is not strong enough to attract any one “lead” investor, said Ms. “They hear your story and you send them the paperwork.”. Hua of Apptimize. ” Uhhuh. But let me tell you for free.

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Cap Table Cofounder Silicon Valley Startup 150

View from Seed

AUGUST 26, 2015

There are a lot of options to expand your deal sourcing, like AngelList, syndicates, angel groups, etc. Favor investment rounds with strong leads that haven’t raised millions of dollars before you. Find people who you think are great and don’t be worried about following their signal. Talk to people and get their POV.

Technical Review 120

Technical Review Angel Investor Software Review Silicon Valley 120

View from Seed

AUGUST 26, 2015

There are a lot of options to expand your deal sourcing, like AngelList, syndicates, angel groups, etc. Favor investment rounds with strong leads that haven’t raised millions of dollars before you. Find people who you think are great and don’t be worried about following their signal. Talk to people and get their POV.

Technical Review 120

Technical Review Angel Investor Software Review Silicon Valley 120

View from Seed

MAY 29, 2019

Historically, seed rounds were syndicated among several different firms. Today, we are seeing less syndication of seed rounds and sharper elbows among many of the funds in the market. Instead of broadly syndicated rounds, we are seeing much more competition for fewer slots. Why Is Seed Investing Becoming More Sharp Elbowed?

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Syndicate Syndication Cofounder Cap Table 267

mashable.com

NOVEMBER 2, 2011

Look for Your Lead Investor. First you’ll want to find a lead investor — someone many other investors will recognize and respect. This list of top angel investors is a good start. Global Syndication Partners. I use a service like Tout to manage my email templates for quickly replies.

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Social Media Startup Angel Investor RSS 80

David Teten

SEPTEMBER 6, 2018

See my summary on how lead investors think about building out their syndicate. . See Where Are the Deals?!: Best Practices of Private Equity and Venture Capital Funds in Originating Investment Opportunities. 5) Manage deal flow. 6) Due diligence. See How to Judge Investment Pitches. 7) Negotiate transaction.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

David Teten

SEPTEMBER 6, 2018

See my summary on how lead investors think about building out their syndicate. . See Where Are the Deals?!: Best Practices of Private Equity and Venture Capital Funds in Originating Investment Opportunities. 5) Manage deal flow. 6) Due diligence. See How to Judge Investment Pitches. 7) Negotiate transaction.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

Rob Go

SEPTEMBER 4, 2018

As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. We are also seeing more investors try to be a part of syndicated A rounds for companies that are raising $5M or more and are really not what most would consider “seed” stage.

North America 36

North America Seed Stage Early Stage Lead Investor 36

Pascal's View

JULY 9, 2017

At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. In contrast, there is limited benefit for being the 2 nd investor or the 10 th investor joining the syndicate of a priced round, so it is common for investors to wait to see “who else is involved”.

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Post-Money Valuation Valuation Cap Table Covenant 49

View from Seed

OCTOBER 21, 2014

Using NextView as an example, since we both seek to lead the seed round and only lead during this round, I’ve seen this trend manifest in one of two ways: In a priced round, the entrepreneur will often share their valuation ask (or a stated floor) for the pre-money valuation of their company much sooner in the process.

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Valuation Founder Seed Stage Angel Investor 336

Both Sides of the Table

AUGUST 1, 2010

If we can come to an agreement we will either lead the round ourselves or partner with other investors. Like Brad Feld I’m syndication agnostic but I have a slight preference toward working with others. The investor strategy is really determined by the management team. This is the nature of compromise.

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Post-Money Valuation Term Sheet Warrant Partner 298

David Teten

JULY 12, 2017

These firms can typically target a large pool of individual value-added investors, surfaceable by industry, region, title, and expertise to support the company. Although EquityZen is primarily an online marketplace for secondary shares in private companies, they also offer syndicated primary investments. Market Insight.

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Syndicate Syndication Institutional Investors LP 60

Feld Thoughts

AUGUST 2, 2010

This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors. They are: Fred Wilson: Lead Investors, Dipshit Companies, and Funding Every Entrepreneur. each are equally happy situations.)

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Angel Investor Cofounder Syndicate Syndication 152

Rob Go

MARCH 5, 2012

One area of fundraising that is not that straightforward is how to put together a syndicate of investors for your seed round. It can be a little puzzling for entrepreneurs to make sense of this, especially since the landscape of seed investors is emerging and different seed investors act quite differently from one another.

Syndicate 49

Syndicate Syndication Lead Investor Due Diligence 49

Genuine VC

JULY 30, 2012

By communicating pricing expectations with potential lead investors, I mean sharing either an “ask” or even stated floor for the pre-money valuation of the company (with a priced preferred round) or explicitly stating a valuation cap (for convertible note round).

Valuation 136

Valuation Pre-Money Valuation Angel Investor Syndicate 136

David Teten

SEPTEMBER 6, 2015

Some corporate funds now lead rounds. Others follow independent financial lead investors and most require that independent investors be part of the syndicate. Teten: What makes for a good vs. bad corporate venture investor? Corporate VCs are at the table with all the other venture funds.

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

Both Sides of the Table

APRIL 3, 2010

They don’t mind being the lead investor on deals that they seeded. In my first deal we took angel money in the seed round (from 2 angels) and an early-stage co-investor in the A round. In my third seed deal we co-invested with a seed fund and then syndicated the rest to strategic angels. I like the way he thinks.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

View from Seed

AUGUST 12, 2015

I once showed a company to another VC for an investment we were syndicating. This investor loved the team and thought the solution they were building was compelling. In particular, he asked one very clever question of VCs to run a smoother, more effective process, culminating in four term sheets from interested, lead investors.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

View from Seed

AUGUST 12, 2015

I once showed a company to another VC for an investment we were syndicating. This investor loved the team and thought the solution they were building was compelling. In particular, he asked one very clever question of VCs to run a smoother, more effective process, culminating in four term sheets from interested, lead investors.

Seed Stage 120

Seed Stage Marketing Angel Investor Term Sheet 120

View from Seed

OCTOBER 22, 2015

Work on securing a lead investor who can then help in forming a syndicate. Back-channel through mutual connections and talk to quality references in the firm’s network. The ultimate reference is through a portfolio founder.

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Term Sheet Due Diligence Seed Stage Seed Capital 120

Professor VC

APRIL 1, 2010

While this may certainly be the case with unsophisticated angels (much less of these now) or in cases with no lead investor, Id argue the opposite. In my experience, venture investors are more focused on percentage ownership, which obviously requires a trade-off with the amount invested and valuation.

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Term Sheet Angel Investor San Jose Venture Capital 32

Agile VC

JANUARY 12, 2012

In fact we’re not very influenced by how a startup is received by other investors, as we’re comfortable investing in seed stage startups as either lead investor or as a participant with other investors. What’s Your Favorite Future?

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Seed Stage Silicon Valley Syndicate Syndication 100

Growthink Blog

MAY 3, 2010

The "lead" VC firm creates the terms of the deal. The other investors are called "syndicate investors" or "co-investors" and invest at the same terms as the lead investor, so you only need to negotiate once. The round was "led" by one VC firm. They also invest the most money.

Venture Capital 71

Venture Capital LP Syndicate Syndication 71

Austin Startup

AUGUST 16, 2010

The company announced it is raising $48 million from a unique syndicate of investors comprising industry leading venture capital firms and semiconductor innovators. We look forward to taking advantage of the insights and know-how of these industry-leading investors.”. Power consumption matters more than ever.

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Syndicate Syndication Venture Capital Texas 54

View from Seed

JANUARY 26, 2016

This has allowed these firms to invest larger amounts at the later end of the seed spectrum, and some have even started to lead or syndicate Series A rounds with others. They are either repeat successful founders or first-time founders who are still well-known and well-respected individuals by the lead investor.

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Seed Stage Early Stage Cofounder Finance 120

David Teten

JANUARY 7, 2019

It is very difficult to get an investor to commit without that direct dialogue, ideally with as many of her colleagues as possible. A retail investor might join an existing syndicate on a crowdfunding site based on a deck and maybe an email.

Syndicate 60

Syndicate Syndication Dilution Partner 60

Rob Go

JANUARY 9, 2012

Syndicate Composition: Angels: 5. VC Lead: 5. We aren’t that dogmatic about syndicate composition. Our main requirement is that there is a strong lead. We have a bias towards leading or co-leading rounds, but will also participate in rounds facilitated by like-minded lead investors.

Portfolio 46

Portfolio Syndicate Syndication Cofounder 46

Rob Go

JULY 17, 2014

We want to be able to comfortably lead these rounds and speak for 1/3 – 1/2 of the capital or more. Our new fund size allows us to do that and continue to play the part of the lead investor. This leads to the second factor. In most ways however, Fund II is a carbon copy of fund I.

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Seed Stage Early Stage Due Diligence Liquidity Event 69

www.paulgraham.com

APRIL 28, 2010

Mechanics Angel investors often syndicate deals, which means they join togetherto invest on the same terms. In a syndicate there is usually a"lead" investor who negotiates the terms with the startup. Dont feel like you have to join a syndicate, though. Its not thathard to do it yourself.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

David Teten

FEBRUARY 3, 2014

That said, our experience so far is that these online markets are most useful to identify opportunities to join a syndicate, not to source and lead a new investment. Once that lead investor is in place, then these online tools are very valuable for filling out the round.

Private Equity 114

Private Equity Venture Capital Technical Review Equity 114

David Teten

JUNE 12, 2014

We saw over time that our investor group, just like Angel List and most other angel groups, was good at syndication and not so good at leading rounds. As a result, we launched the Fast Track program, which helps VCs and active investors who are HBSAANY members to syndicate rounds with value-added members of our network.

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New York Angel Groups Connecticut Florida 114