AngelList Syndicate: Why?

2)     Why is VentureSouth doing this?

Why are you doing it? We have several reasons for attempting to create our AngelList syndicate.

First, it’s an experiment to see if we can. There are very few syndicates outside of Silicon Valley and NYC. We’re hoping to prove that they can be a valuable structure in underserved markets like the Carolinas.

Second, everyone recognizes the perennial “lack of capital” problem in the Southeast. There are only so many people interested in angel investing, and only so many in-person angel groups that we can operate cost-effectively. This might be a way to increase the amount of capital available for startups without requiring new infrastructure (or government handouts).

Third, to help the portfolio companies in which we invest raise their profile in the funding communities outside of the Carolinas

Fourth, to expand VentureSouth’s reach to potential investors outside of our physical groups. We don’t have groups in smaller and larger markets that are uneconomical for us to reach … but now people in those places can access (some of) our deal opportunities if they like the look of them.

Lastly, for fun. This seems like something that we would enjoy doing.

Aren’t you a bit late to this party?  Yes. Brad Feld did his three years ago, and other syndicates have been around a while and proven to be interesting. However, we are treading new ground as there few syndicates looking at southeastern deals, and we are always interested in ways to make angel investing more accessible and lucrative for investors.

AngelList Syndicate: How It Works

This week, VentureSouth is launching our AngelList syndicate. You can learn more about it on AngelList, our website overview page, and in a series of blog posts explaining how it works, why we’re doing it, and why you should consider investing. 

1)     How it works

What is an AngelList syndicate?  It is an opportunity for investors – those that already use AngelList and those who might be interested in doing so – to coinvest alongside VentureSouth members in our portfolio companies.

How does it work?  Once you register with the platform, you can see the investment opportunities that we make available and, if you like what you read, invest in the company. You can invest as little as $2,000 in our syndicate. AngelList’s guide to syndicates is here, and there are many other sources to learn about the pros and cons.

Will you share every deal on the platform?  No. Not every company we invest in is suitable for a syndicate. In many cases, the rounds are fully funded from our in-person angel groups and funds; in other cases, VentureSouth members comprise a small part of a round led by another group, so it isn’t appropriate for us to help “lead” the company in raising money; in others cases, we might invest in a bridge round or later stage financing that doesn’t fit on AngelList.

So which deals will you put on?  Investments we are leading or co-leading in companies raising true “angel rounds” where there is a small but meaningful gap in funding that remains after we have invested. This is likely to apply particularly in companies where there are few specialist investors in the Southeast – consumer-related companies, ecommerce apps, or green/sustainability companies, for example.

What does it cost? It costs nothing to “back” the syndicate and stay informed about the deals available. If you choose to invest in a particular opportunity (for which the minimum investment is $2,500), you will share in the fee that AngelList charges to set up its investment vehicle. (How much you pay depends on your share of the total amount invested through the investment vehicle.) VentureSouth charges no fee for this.

If the deal pays off, you get your capital back and this fee refunded; you then pay a “carry” of 20% on the profits of the deal to AngelList and/or VentureSouth.

Sounds interesting. How can we back the syndicate? Follow this link, do your diligence, and sign up. We look forward to working with you!