The Role of a Syndicate-lead Investor

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After much debate, Bee Partners has opened its AngelList Syndicate and will experiment with this exciting new tool available to both investors as well as entrepreneurs.  Here at Bee Partners, we take the concept of ‘Investor’ very seriously, and  personal responsibility is an attribute that we look for in the founders we invest with.  For us, that responsibility takes many shapes: Continuing to support founders who haven’t found product-market fit and now face capital constraints; Being quick, direct and honest with founders when we pass on the opportunity; Following up after pledging introductions and capital support; and being serious about the trust placed into us by our Limited Partners in the Fund.   We think these should be the expectations that all founders should have with their angel/Seed investors.

Being a Syndicate Lead brings with it additional responsibilities, so much so that we recommend that Founders diligence a potential Syndicate lead as much as they would a potential VC lead.  Here’s how we Bee sees those responsibilities:

  • A Syndicate lead should have sufficient bandwidth to be constantly thinking about how to help mitigate a Company’s risk, and improve the likelihood of Company success

  • A Syndicate lead should always be available to the company, its founders and its underlying investors, regardless of the stage and pace of progress

  • A Syndicate lead should advise, evangelize and advocate on behalf of the company, especially so when the progress is not yet headed up and to the right

  • A Syndicate lead should be in the business of serving to company build, rather than investing.  More on this in future blog posts.

  • A Syndicate lead should have sufficient depth to replace capital if, in a sideways or bridge round, the underlying investors elect not to participate

  • A Syndicate lead should be experienced and professional enough to accept the reporting requirements that the underlying investors should expect

Bee Partners is still a young firm, and we do not anticipate that our syndicate will ever grow as large as other brand-name angels.  That’s not our intention.  We see Syndicates as an extension of our current fund, a way to further support our Companies by providing additional capital.   Please note that our Syndicate terms are set to ensure alignment with our underlying LPs in the Funds.

At Bee, we are opening up Syndicates for the following reasons:

  • It’s an opportunity to accelerate a financing with pockets beyond our own.  We’ve been doing this for years, and AngelList expands that distribution

  • It’s a way for us to expand our investor network and meet more angels who share our passion for venture creation and company building

  • It’s a learning experience for us, especially so in light of new SEC regulations

We will continue to build syndicates intelligently, as we have done for over a dozen companies in the portfolio, and we will continue to nurture those existing co-investor relationships.  I welcome the opportunity to discuss this exciting tool with fellow investors, so please reach out if you’d like to discuss further.

Quick notes:

* We’re going to be selective about which angels join the syndicate
* We may never use the Syndicate feature, and instead bring co-investors alongside us
* We know that many fantastic investment opportunities never even hit Angellist; joining the Bee Partners syndicate will never be a substitution for being an investor in our Fund
* While we would love to be able to Syndicate every investment made by Bee Partners, we know that various limitations will never allow that to happen.   We will be as transparent as possible here.