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FAQ

  • What is a syndicate?
  • A Syndicate is a group of investors who invest in an Enterprise either individually or through a common vehicle. Each syndicate has a Lead investor who represents the Syndicate during the entire process of deal making including representing the Syndicate post investment.
  • What are the benefits of syndicates?
  • Syndicates help investors with flexibility and enterprises with speed in closing a deal. Investors have the flexibility to choose co-investors in the syndicate depending on their mutual alignment on size, stage and sector. This provides an opportunity to benefit from the collective know-how and benefit from the experience of the lead investor Enterprises are able to mobilise more capital in a shorter time and gain access to a larger network of investors
  • How much do syndicates cost?
  • Syndicate members may choose to pay the Lead fees or carry or such other benefits for representing the Investor group. Investors pay success fee and such other fees for the deal pro-rata to their respective investment or in such ratios as is mutually agreed by the investors in the Syndicate.
  • What is the legal structure of a syndicate?
  • Syndicates may be formed on the basis of formal or informal understanding between respective investors. The Lead investor will represent the Syndicate in the deal making process including representing the Syndicate post investment.
  • Are syndicates legal?
  • Syndicates need to comply with securities and exchange regulations.
  • What is a lead investor?
  • A Lead investor is an investor (individual or institution) who leads and represents a Syndicate in the investing and post investment process including but not limited to due diligence, negotiating transaction documents, representing the Syndicate on the Board, etc. The Lead investor is expected to invest at least 25% of the deal amount.
  • Lead: How do I create a syndicate?
  • To create a syndicate, click the ‘Lead’ button on your user profile. You can then enter information about how many deals you expect to lead each year, your typical investment size and so on. You can then reach out to investors on the platform and within your network to indicate your status as ‘Lead investor’ and build your syndicate.
  • Lead: Can my VC fund form a syndicate?
  • Yes. Individuals and VC funds can both form syndicates.
  • Lead: What am I committing to when I start a syndicate?

  • There are no requirements to simply start a syndicate. Your commitments begin when you syndicate your first deal. You must:

    • Make a significant investment in the deal
    • Lead the deal process from diligence to execution and post investment management subject to mutual understanding with other investors in the Syndicate
    • Disclose potential conflicts of interest such as warrants, advisory shares or an investment in a previous round
    • Review and screen potential investors in each deal
    • Respond to questions from syndicate investors about their investments, although they may have limited information rights

    Leads are not required to syndicate every investment they make.

  • Lead: Who can invest in my syndicate?
  • Any accredited investor on the BayTree platform can apply to invest in your syndicate. You can then accept or reject their request to be included in your syndicate. You can also remove investors at any time. You should only include those investors whom you trust and want to work with.
  • Lead: Can I share a deal privately with selected investors?
  • Yes, you can invite select investors to participate in a syndicate.
  • Lead: Investors: What am I committing to when I back a syndicate?
  • You are committing to invest alongside the Lead investor on the same terms as the Lead investor other than mutually agreed exceptions. You may agree to pay the Lead investor a fee or such other compensation. This is not a legally binding agreement and you may opt out of a Syndicate at any point in time.
  • Investors: How do I invest in a syndicate deal?
  • You have to indicate interest to invest in a Syndicate. The Lead may choose to accept or decline your request.
  • Investors: How does investing in a syndicate differ from investing in a VC fund?

  • Syndicates are intended to complement, not replace VC funds. Differences include:

    • Syndicate investors choose which startups they want to invest in and can stop investing any time
    • Syndicates have much lower minimum investments
    • Leads typically personally invest more per deal than GPs
    • Except in rare cases, syndicates do not charge management fees

     

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