David Teten

JANUARY 7, 2019

A retail investor might join an existing syndicate on a crowdfunding site based on a deck and maybe an email. It is very difficult to get an investor to commit without that direct dialogue, ideally with as many of her colleagues as possible. However, usually the Lead Partner is going to do a worse job pitching you than you can.

Syndicate 60

Syndicate Syndication Dilution Partner 60

Haystack

AUGUST 18, 2019

Those employees and operators, who often have some book wealth now (or are running syndicates on AngelList or acting as a scout for another fund) can easily dump $50K-$100K into one of their ex-colleague’s new startups, or put this money into their friend’s new startup, or their friend’s new hot deal.

Seed Stage 108

Seed Stage Cap Table Early Stage Malaysia 108

View from Seed

JUNE 30, 2015

You may actually need to raise a few financing rounds just to get to a series A, so think about the syndicate you are constructing (will they be loyal to you?), I’d encourage founders not to be too discouraged by this but also to be really smart about how they use their capital at this stage.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Rob Go

SEPTEMBER 2, 2014

The founder sacrificed having potentially “smarter money” around the table, but got the same amount of dollars in the bank for less dilution. Individual angels can lend their credibility to an investment through an Angelist syndicate, even if they are only investing a pretty small amount of capital themselves.

Cram Down 66

Cram Down Institutional Investors Dilution Seed Stage 66

View from Seed

JANUARY 26, 2016

This has allowed these firms to invest larger amounts at the later end of the seed spectrum, and some have even started to lead or syndicate Series A rounds with others. Third, founders at this stage have an incentive to minimize dilution at the point when their equity is the least valuable.

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

Hunter Walker

JANUARY 20, 2015

If you just need the money, stick unknown angels in an AngelList Syndicate so they have more limited information rights. Or when an exciting A Round may “dilute” them (no, you own less of something much bigger. Avoid these folks. You can reference check angels just like you would VCs or employees.

Cap Table 48

Cap Table Warrant Syndicate Syndication 48

Rob Go

AUGUST 26, 2013

As a result, many seed funds have pulled back, started making later stage investments, and even focusing more on mini-Series A’s with a syndicate of seed funds. But ultimately, this has come to roost over the past several years as the series A Crunch has pummeled a bunch of these companies and their investors.

Valuation 68

Valuation Seed Stage Syndicate Syndication 68

Professor VC

JULY 25, 2013

Another area where I''m not sure I stand is with some of the more formal referral and syndication programs that are emerging now. AngelList (which I remain a big fan) also recently launched a syndicate program. In this program, an angel can ask the entrepreneur for an allocation of the round and then syndicate through AngelList.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

View from Seed

JANUARY 28, 2016

This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution. As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases.

Cofounder 120

Cofounder Finance Founder Syndicate 120

Both Sides of the Table

APRIL 3, 2010

They said that they didn’t want the extra money or dilution. In my third seed deal we co-invested with a seed fund and then syndicated the rest to strategic angels. My very first seed deal was a company that told me flat out that they didn’t want to raise more than $500k. We offered them more : $750k-1 million.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

Rob Go

JANUARY 17, 2017

In the last three investments I’ve made, there has either been a lifecycle VC involved or one was interested but didn’t end up being part of the syndicate. Although seed investing has become increasingly the domain of specialized seed funds, large lifecycle VC’s continue to participate as well.

Due Diligence 28

Due Diligence Seed Stage Syndicate Syndication 28

Agile VC

JULY 11, 2012

Like any other form of diluting your focus… it occasionally works, but usually doesn’t. How to Evaluate Firms for a Seed VC Syndicate 10 July 2012, 5:13 pm What A VC Orders for Breakfast Says 27 June 2012, 10:16 am To Leave or Not to Leave as Your Startup Grows 12 June 2012, 12:21 pm. What’s Your Favorite Future?

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

Professor VC

JANUARY 17, 2008

One of my comments was that we would likely see more institutionalization of angel groups and syndication of deals among groups. My facebook can beat up your facebook. The theme of the event was angel investment trends for 2008. Im sure I lost all of you, but I feel better now having completed the analysis.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. In 2020, the Google for Startups Black Founders Fund awarded $5M of non-dilutive capital to exceptional black founders and 8 Texas founders took a big chunk of it.

Texas 90

Texas San Antonio Houston Dallas 90

Both Sides of the Table

FEBRUARY 25, 2010

We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. We ended up agreeing a term sheet for $16.5 million at a $15 million pre-money valuation.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Rob Go

JANUARY 28, 2016

This is the best time to fundraise because that’s when you are able to command a meaningfully higher valuation for your next round to minimize your own dilution. This is why we typically recommend not building a huge syndicate during a pre-seed — you want everyone involved to be on the same page around what success does or does not look like.

Cofounder 28

Cofounder Finance Founder Syndicate 28

David Teten

JULY 11, 2019

So when a company in which I’m an investor is raising a later round, should we (the VC investor) keep our pro rata or get diluted? . Ranked in descending order of frequency of use, they are: 1) Syndicate the investment out to coinvestors, without charging any fee. You have to know when to hold them and know when to fold them.

Syndicate 60

Syndicate Syndication Institutional Investors Dilution 60

Hunter Walker

SEPTEMBER 5, 2021

I really liked Jason Lemkin’s “ Do You Have a Weak Investor Syndicate ” blog post from earlier in the summer. I rather see the difference in dilution be used to continue hiring amazing team members going forward than add a few more basis points to my ownership. Go read it and then come back here…. Long term greedy!!!!

Cap Table 94

Cap Table Seed Stage Syndicate Syndication 94

Professor VC

JUNE 20, 2011

We managed to pull together an angel syndicate and close $450K on 9/30 after working the phones the last few days and anxiously waiting for signature pages to show up on the fax machine and wire confirms to hit the bank account. offering to invest $75K if we could find another $250K by September 30, 2005. So what does this all mean.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

www.paulgraham.com

APRIL 28, 2010

Some angel investors join together in syndicates. Whatkind of anti-dilution protection do they want? The angel now owns 200/1200 shares, or a sixth of thecompany, and all the previous shareholders percentage ownershipis diluted by a sixth. Startups valuations aresupposed to rise over time. In the Bay Area its the Bandof Angels.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

www.paulgraham.com

APRIL 28, 2010

Mechanics Angel investors often syndicate deals, which means they join togetherto invest on the same terms. In a syndicate there is usually a"lead" investor who negotiates the terms with the startup. Dont feel like you have to join a syndicate, though. Dilution is normal. So its your choicewhether you get diluted. [

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Rob Go

MAY 20, 2014

I find that it’s also pretty typical for an existing VC investor to be willing to syndicate the deal with another outside investor. In that case however, the founders might end up taking a lot of dilution. The existing investor will need to buy up to get to 20%+, and the new investor will want to buy 20%.

Valuation 76

Valuation Dilution Post-Money Valuation Syndicate 76

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario. A company raises $1m of seed money from angels in a convertible note with a $6m cap.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Austin Startup

AUGUST 1, 2017

By driving the valuation up, you’re usually not reducing your dilution in the round; you’re just increasing the size of the check they need to write in order to get to their desired %. Secondly, most institutional investors have a minimum post-closing % they need to own in order to justify an investment.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48