Invest as a group with SeedLegals Syndicate

Are you an angel investor and part of a group of other similar investors? Or the lead investor of a group? Great news: it just got easier to invest as a group in companies on SeedLegals.

With SeedLegals Syndicate*, it’s faster and easier for groups of angel investors to invest in companies fundraising on SeedLegals. In this post, we explain how Syndicate works and how to get started.

Contents

• What is SeedLegals Syndicate?
• Why use SeedLegals Syndicate?
• How to use SeedLegals Syndicate
• What happens next?
• What’s the legal structure?
• Who owns the shares? What about SEIS/EIS?
• Talk to an expert

What is SeedLegals Syndicate?

As a lead investor, you can use SeedLegals Syndicate to generate and share the legal documents to create your syndicate before you invest together in a startup. No need to fork out to create an SPV for the deal, your syndicate can invest as a group using the SeedLegals MPL Nominees company.

Why use SeedLegals Syndicate?

For lead and follow investors, the entire process of investing is much faster and far more straightforward with SeedLegals Syndicate:

⏱️ Save time on admin
Set up your syndicate with SeedLegals MPL in less than a day. Set one carry fee for the syndicate. Spend less time on admin, free up your time to hunt for great deals.

☂️ Effortlessly comply, with built-in best practice
Run your syndicate deals with SeedLegals MPL using our verified documents and straightforward workflow.

🪄 Simplify your ongoing admin
Manage your syndicate group on the SeedLegals MPL dashboard, and track closed deals in your investment portfolio view.

💷 Offer your group SEIS/EIS tax relief
Where investments qualify, members of your syndicate can claim SEIS/EIS tax relief on their investments after the round is closed, just as if they invested as individuals. (The syndicate members’ eligibility depends on their individual circumstances and any later changes in their situation.)

⚖️ Save on legal fees
SeedLegals Syndicate costs just £1,990 + 1% of the syndicate investment, + VAT, capped at £10,000. For example, if your syndicate will invest £200,000, then the fee will be £3,990 + VAT. This fee is paid to SeedLegals MPL by the investee company.

How to use SeedLegals Syndicate

As the lead investor, here’s how to use Syndicate:

1. Create a syndicate deal
   Select the company you’ll invest in.
   If the company isn’t yet using our platform, add a contact for the company and we’ll invite them to join.
2. Set terms for the syndicate
   Verify your eligibility to participate in the syndicate, and set the terms for the deal.
3. Notify the company about the syndicate investment
   When you click to notify the investee company, this investment will appear in their investor tracker and term sheet.
4. Add investors to the syndicate
   Add or remove members as required.
5. Create and share the syndicate documents
   It takes just a few clicks to create all the legal documents, and to share them with the members of your syndicate. Before investors in your syndicate can view the documents, they each need to complete the self-certification questions to confirm their eligibility. (This is a legal requirement.)
   – Syndicate Agreement – investors can review and sign this document
   – deal sheet – at this stage, investors can review this document but not sign
6. Ask investors to sign the deal sheet
   When your whole syndicate is committed and ready, click to ask them to review and sign the deal sheet. Enabling the deal sheet for signing also notifies the investee company that the deal is fully committed and signing is underway.
7. Notify SeedLegals
   When all members of your syndicate have signed the deal sheet, inform us that the documents are ready. Then SeedLegals MPL Nominees signs the deal documents with the company on behalf of your syndicate.
8. Transfer the money to the investee company
   Coordinate with your syndicate to transfer the cash. The details of the investee company’s bank account are in the deal sheet. (SeedLegals MPL doesn’t currently offer an escrow service to hold the funds.)

What happens next?

After your investment is completed, SeedLegals MPL Nominees holds the legal title to the shares on behalf of your Syndicate investors. This nominee company appoints you, the lead investor, as the proxy in all communications with the investee company.

This means that on behalf of SeedLegals MPL Nominees, you’ll:

• vote, attend, speak, ask questions and demand a poll at any general meeting of the investee company
• sign written resolutions
• propose a resolution or an amendment to a resolution
• receive all documents, notices and requests sent by the investee company to its shareholders and/or to SeedLegals MPL Nominees

After consulting your follow investors, you can vote or act according to the syndicate’s wishes.

What’s the legal structure?

SeedLegals Syndicate is operated by SeedLegals MPL (a subsidiary of SeedLegals), an appointed representative of Kroll Securities Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 466588)

Another subsidiary of SeedLegals, SeedLegals MPL Nominees, holds the legal title to shares in investee companies on behalf of all SeedLegals Syndicate investors, who have a beneficial interest in the shares. This means that SeedLegals MPL Nominees signs the Shareholders Agreement on behalf of the Syndicate investors, and is also named on the share certificates, the register of members and any confirmation statement.

This information is detailed in the legal documents for Syndicate investments.

Who owns the shares? What about SEIS/EIS?

The share certificate for your shares (as lead investor) and the shares of the follow investors is in the name of SeedLegals MPL Nominees. This is because SeedLegals MPL Nominees is the legal owner of the shares.

Investors in a syndicate can get SEIS/EIS tax relief if the individual(s) and the investment are eligible for SEIS/EIS. After the round is closed, the investee company can use SeedLegals to complete the SEIS/EIS compliance for your individual syndicate investors.

If the investments made by your syndicate members are eligible for both SEIS and EIS, then two share certificates are issued to SeedLegals MPL Nominees: one for SEIS shares and one for EIS shares. (By law, EIS shares have to be issued a minimum of one day after SEIS shares.)

Talk to an expert

With over £1.3 billion in deals closed on SeedLegals, we have plenty of experience and data to help you:

✅ Save time and money on your syndicate admin

✅ Negotiate to achieve the most suitable terms for the deal

✅ Create clear, easy to understand legal docs for your syndicate

When you use SeedLegals MPL to invest as a Syndicate, you get unlimited support from your SeedLegals account manager. Interested? Fill in the form and we’ll be in touch to arrange a call 👇

Remember, investing in new and early-stage businesses is risky, including the risk that you might lose some or all of your investment. You should only invest if you believe you have the knowledge and experience to make your own decisions, and to understand and manage the risks associated with these investments. We recommend that you seek independent financial advice before making an investment.

* All references to SeedLegals Syndicate and SeedLegals Rollup refer to the Syndicate and Rollup services provided by SeedLegals MPL Limited, company number 14319103. SeedLegals MPL is an appointed representative of Kroll Securities Limited, which is authorised and regulated by the Financial Conduct Authority FRN: 466588