Angel Syndication: Best practices

  • Build relationships – Find reasons to check-in with regional angel group leaders regularly so you can form the relationships critical to making deals succeed.
  • Syndicate early – If you need other angels to get to critical mass of domain expertise or money, then get other angel groups involved when your own group is in the preliminary due diligence, or post-presentation due diligence stage.  Don’t wait until you’ve already got everything done.  Wait too long and they’ll feel like they have no ownership of the deal.
  • 1 DD team – Unite ALL interested investors from all groups onto one due diligence team, all sharing one set of tools (in our case we all used AngelSoft’s Co-invest feature to make sure everyone was on the same mailing lists and looking at the same documentation).
  • Go into the summit strong – Ensure you have your champions (from multiple angel groups) in place and ready to attend the summit. Ensure the entrepreneurs are fully informed on the process, what it will take, and the benefit to them.  Don’t have a regional summit?  Here is a template for one.
  • Clear roles – With a due diligence team composed of dozens of angels from a half-dozen groups – it is easy for the process to grind to a halt.  It is critical to have one person responsible for keeping communication lines open and the process moving forward.  This is distinct from negotiation or due diligence – those areas of expertise might lie in the same person or might now… but it is unwise to assume that just because someone is good at negotiation they can facilitate the syndicate, or vice versa.
  • Wrap it up in a bow – If all you need is money, be sure you’ve wrapped all the details of the deal into a nice package that is easy to share:  due diligence notes, negotiated term sheet (that follows industry norms), etc.  Invite everyone in to negotiate terms can be quite messy and should only be done with care.
  • Keep the momentum going – Meetings need to keep happening on a fairly regular and frequent timetable (every 2-3 weeks).  This means you’ll lose some people for any given call, but so long as all the KEY people are on the major calls, momentum can continue to build.
  • Include the Treaty – Include this doc in your legal documentation all investors sign.

One thought on “Angel Syndication: Best practices

  1. Pingback: Sector-Based Angel Syndication: a start « Paul G. Silva

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