What is a syndicate?

HBAN specialises in angel syndication which is the internationally recognised best practice model for angel investment as it;

  • stimulates angel investment
  • empowers angel investors to build and maintain a portfolio of investments
  • streamlines the funding process for the entrepreneur.

What is a syndicate?

Syndicates are two or more private investors working together to share the risks and rewards of investing in private companies. Syndicates differ from individual business angel investors, as syndicates are typically comprised of a ‘fixed’ group of people who regularly invest together over a period of time, building trust and leveraging experience.

Business angel syndicates are groups of like-minded investors that invest in a specific region or sector that is of interest to them. They are high net worth individuals who provide smaller amounts of finance (typically in the range €25/£40k to €250/£200k) at an earlier stage than many venture capital funds are able to invest. In Ireland and Northern Ireland business angel syndicates are growing in number and capacity to invest. Syndicates will typically co-invest with seed venture capital funds, government agencies like Enterprise Ireland and other private investors.

The benefits of participating in an angel syndicate are:

  1. Diversified portfolio: portfolio investing (i.e. investing in more than one company) is a lower risk approach to investment compared to the higher risk ‘all eggs in one basket’ approach of investing in just one or two companies
  2. Pooling of economic resources: pooling of funds provides the opportunity to invest in several companies and/or in larger deals
  3. Pooling of skills, contacts and experience:  syndicate members will benefit from each other’s skills, networks of contacts and experience which enhances the possible success and returns of investing
  4. Due diligence: ability to undertake a greater level of due diligence
  5. Recognition: a formal syndicate can leverage its recognition in the investment community to attract deal flow to a greater extent than an individual can
  6. Common Purpose: a syndicate tailored towards preferred industries means that Angels with common interests can share common goals and foster a sense of camaraderie

How HBAN brings value to Syndicates:

  1. Helping the syndicate to devise a syndicate charter
  2. Support in deciding syndicate structure
  3. Sample Term Sheet & supporting Guidance Notes
  4. Sourcing of companies for syndicate meetings - companies prepared for pitching in partnership with the Irish BIC's
  5. Investors Guide - Insights for Business Angel Investors
  6. Syndicate Guide - available on request
  7. Entrepreneur Guide - Insights for Entrepreneurs
  8. Online investor platform - GUST

HBAN works regionally in partnership with the Irish Business Innovation Centres (BICs) in Dublin, Cork, Waterford, and Galway and Clarendon Fund Managers in Northern Ireland, who each run local angel networks. HBAN introduces suitable investors to each other and to entrepreneurs. HBAN takes no part in any investment, nor does it provide information to entrepreneurs or investors in relation to particular investments.  HBAN does not receive any fee, commission or payment from investors or entrepreneurs in respect of completed investments.

HBAN does not provide investment services under the European Communities (Markets in Financial Instruments) Regulations 2007 and is not an investment advisory firm pursuant to the Investment Intermediaries Act 1995 as amended.

Investing as part of a syndicates is not for everyone, here’s some questions to consider:

  • How much are you prepared to invest?
  • How much time can you commit to the process?
  • With the support of HBAN and other deal leads, will you occasionally be able to lead a deal to completion on behalf of the syndicate?
  • Can you act as a mentor?
  • Are your business experiences & skill set something that can benefit the type of companies you wish to get involved in?
  • Can you accept new roles (e.g. Company Director) and incorporate them into your business life?
  • Can you resist the temptation to micro-manage your portfolio of investments?
  • Are you willing to learn from other more experienced angels?

Want to find out more?

If you are interested in forming or joining an existing syndicate, HBAN can connect you with active angel investors with similar investment interests. Submit a membership application or contact the HBAN team. Meet our syndicates here.