Angel investing through a syndicate
Investing used to be scary for me. But I found a way to do it in a way that was accessible for me as a brown girl just a few years into having a job.
Angels, investing, and syndicates
When most people think about investing, they picture giant venture capital firms writing big checks to companies on the verge of IPOs. But there are many ways founders can raise money: friends and family rounds, angel investors, grants, and VCs, to name a few.
I want to focus on syndicate angel investing—a way to pool money from a group of investors to support a single company. This is how I angel invest, and it has made investing accessible to me and many others. For small check sizes, I can invest in promising pre-seed startups.
✅ That’s the magic of syndicates: they democratize investing.Why Syndicates Work for Investors
Syndicate angel investing offers several advantages, especially for new or smaller-scale investors:
Access to deal flow: Startups don’t have time to pitch to every potential backer, especially smaller investors. But syndicates pool money, so founders pitch to the syndicate lead, who evaluates the deal and opens it to the group. Without a syndicate, getting into these rooms might be impossible.
Reduced risk of $$: Smaller check sizes mean you can dip your toes into angel investing without taking on massive financial risk. If a deal doesn’t work out, you’ve only lost a manageable amount.
Diversification: Investing smaller amounts in multiple startups allows you to spread risk and diversify your portfolio. Instead of betting big on one company, you can make smaller bets across several.
Benefit from the expertise of the lead investor: Each syndicate has a lead investor who vets deals, handles the due diligence, and manages logistics like cap tables and legal paperwork. You benefit from their expertise without taking on the administrative burden yourself.
Why Syndicates Work for Founders
Syndicates aren’t just a win for investors—they’re also great for founders. Here’s why:
Making things easy: Founders prefer one $50K check over 10 individual $5K checks. Syndicates consolidate funds into a single entity, making life easier for the startup when it comes to legal and administrative work.
Get going: Angel syndicates often invest in companies that are too early for VCs. They provide the runway for founders to refine their product, validate their market, and prove customer value.
Mentorship and network access: Syndicates bring more than just money. They connect founders to a network of investors who can offer advice, mentorship, and even follow-on funding.
Take risks: Syndicate members often have experience in high-risk industries, making them more willing to take bets on bold ideas that might not appeal to institutional investors.
Lack of access to big VCs: Syndicates are particularly valuable for first-time founders or those from underrepresented groups who might lack access to big-name VC firms. Many syndicates intentionally focus on supporting diverse founders.
Niche market: Unlike VCs with broad mandates, syndicates can lean into specific interests, such as social impact or sustainability, aligning their investments with personal passions.
Flexible terms: Syndicates may offer founders more founder-friendly terms compared to VCs, focusing less on aggressive equity stakes or board control.
My Experience with Syndicate Investing
In the past few years, I’ve met incredible founders, invested across multiple industries, and gained insight into what startups need to succeed—all thanks to investing through a syndicate.
I used to think angel investing required deep pockets and tons of expertise. But by starting small, learning from every deal (even the ones I passed on), and leveraging the structure of a syndicate, I’ve grown as an investor.
Now, I’m working on crafting a more intentional personal portfolio for my investments—but more on that in another post. :)
Angel investing, especially through a syndicate, has made investing accessible and rewarding for people like me who are still learning and growing. While there are cons to this approach, the benefits have far outweighed the risks in my experience. I’ll dive into the downsides in a future post. For now, I hope this gave you a peek into why syndicate angel investing might be a great way to get started.