The Dual Role of Syndicates
For many syndicates, securing a deal is just the first step.
How can you help that founder over a period of months or years, to ensure success for them and for your co-investors?
The more a founder can leverage his or her investors, especially in the early stages, the likelier the founder can build a solid company. And the more successful a syndicate’s portfolio is, the stronger its track record, the bigger tickets it is allocated and the better the opportunities that come its way. In other words, a successful relationship relies on both partners to put the work in.
Leveraging Investors for success
Quentin Nickmans, co-founder of Hexa points out that business angels are not required, generally speaking, to be very active investors, as companies tend to release reports just once a quarter. But founders do typically have asks, including introductions, referrals and feedback.
Other syndicates are more time-intensive. For example, at product-focused syndicate Mozza Angels, members are now asked to dedicate at least 30 minutes every quarter to speak to founders about relevant topics, be that hiring, team organisation or product feedback.
“Even with our little community of 50 people, we have really strong engagement, says Mozza Angels co-founder Adrien Montcoudiol.
Effective Communication: The Key to Collaboration
But how do you ensure your co-investors will be keen to jump in? One way is to keep in regular contact. For example, Mozza Angels uses a Slack channel for its 50 core members to discuss and share deals. The more transparent the communication, the likelier that co-investors will bring forward their own ideas, opinions and dealflow.
Similarly, the more members know what’s going on with target companies and the specific problems and / or asks the founders have, the likelier the co-investor can feel useful and relevant, and offer to pitch in.
Selecting the Right Members for Syndicates
As is often the case with syndicates and investing in start-ups, finding the right people in the first place is key. New members need to know what they’re getting involved in, what would be required of them, and whether their background fits the investment thesis.
Montcoudiol of Mozza Angels says, “I would say the quality of the people you can bring on board is a big differentiator, because this will impact the sourcing, the analysis and the quality of the support you can provide the founders.”