Syndicates allow multiple investors to co-invest in a single startup deal, with a lead investor doing the primary work of sourcing, diligencing, and negotiating the terms while syndicate members contribute capital.
How syndicates work
1. A lead investor (the "syndicate lead") identifies an investment opportunity
2. The lead negotiates terms, performs due diligence, and takes a board seat or observer right
3. The lead invites their syndicate network to co-invest under the same terms
4. Capital is typically pooled into a Special Purpose Vehicle (SPV) that holds a single position on the cap table
5. The lead earns carried interest (typically 10–20%) on profits from syndicate members' capital
AngelList syndicates
AngelList popularized the online syndicate model, enabling angel investors to build and lead syndicates with global reach. Top syndicate leads on AngelList have deployed hundreds of millions in aggregate, investing alongside institutional VCs.
SPV structure
Most syndicates use a Special Purpose Vehicle (LLC or LP) rather than having each investor appear individually on the cap table. This simplifies cap table management for the startup — the SPV holds one line on the cap table regardless of how many angels participated.
Benefits of syndicates
- For startups: Access to larger check sizes and diverse networks from a single deal
- For leads: Ability to write larger checks and build track record
- For syndicate members: Access to deals they couldn't source alone; smaller minimum checks
Carry and fees
Standard syndicate economics:
- Carried interest: 15–20% of profits above the invested capital
- Management fee: 0–2% annually (many syndicates charge no management fee)