The power of many: syndication in angel investing and how to navigate the admin jungle

by EBAN member bunch.capital

Supporting entrepreneurs in their early stages is a meaningful and rewarding endeavor. Nonetheless, each investment opportunity requires a significant commitment of capital, time and risk. As a result, syndication is becoming a more popular way for angel investors to act together.

The Joys and Pains of Joining Forces

By pooling resources with peers, investors can gain access to a wider range of investment opportunities and benefit from the collective knowledge and experience of the group while at the same time diversifying their portfolio.  Conversely, syndication gives entrepreneurs access to a larger pool of capital and a diverse group of investors with different perspectives and networks. This can be incredibly valuable when it comes to scaling a business and navigating the challenges of early-stage company building.

However, syndication also means taking on additional administrative responsibilities. This can be overwhelming, especially as deal frequency increases and the size of the portfolio grows:

• Structuring and legal work: Drafting and reviewing limited partnership agreements, obtaining power of attorneys, registering the company, preparing and filing additional paperwork, dealing with banking & KYC – the time and effort required to set-up co-investment entities is often too demanding for semi-professional investors and de-focuses from their actual investment activities.
• Accounting and tax: Building a relationship with accountants and tax advisors for ongoing bookkeeping, financial statements, tax returns, and disclosures can be time-consuming and costly.
• Performance monitoring and shareholder management: Tracking financial performance and relevant KPIs of the portfolio companies on a regular basis as well as shareholder resolutions – often still done manually via spreadsheets, calls and emails.

Smoothing the Way with bunch

At bunch we are streamlining the process of syndicating investment opportunities with our Club Deal product allowing digital entity creation and banking, seamless investor onboarding, deal creation and co-investor management, portfolio performance tracking, online shareholder voting and the setup of data-rooms.

We are excited to join EBAN and share our journey of building the operating system for private market investors. Our goal is to eliminate friction in the private markets, freeing up time for fund managers, business angels, and founders to focus on tackling the challenges of tomorrow. With over 500 investors and over €200M assets under administration, join bunch and run your syndicate now.

If you are an EBAN member Bunch will offer you 5% annually on your Club Deals. Contact us for the special discount code!