Why I'm interested in Syndicates.

🌱 - A collection of sprouting thoughts.

Syndicates, the way I see them are VC funds that are created for the purpose of making a single investment. Unlike traditional funds that pool in in cash for a series of investments, syndicates are on deal only.

They're appealing to me because lately they've been used to pool together funds usually from a number of people and wouldn't necessarily have the capital to manage a deal by themselves. A more practical way of explaining this instead of one person throwing in $250,000 to join on a companys fund raise, 10 people can throw in $25,000 and create a syndicate that let's them invest the same $250,000 collectively with shares split between them. To be more concise, here is what I like:

• They act as a pathway for people to test the venture capital waters and get upto speed with concepts like due-diligence, memos and deal flow
• They open up capital markets to people who wouldn't necessarily have an entry
• The get beginner investors on the cap table and offer the opportunity to learn from more.

There is a lot get out of syndicates for the investor. I'm still trying to figure out for the founder, what [[the value of an angel]] is.

Something synonymous with emerging markets is the blink eye most firms throw to it. Many struggle to raise rounds and scale thier business. This is a problem many founders from under-represnted backgrounds face too, they don't have easy access to capital from traditional funds. Syndicates seemigly advocate for the small guy on both sides.