Investor syndicates

When investors get together as a group and invest together, they’re a syndicate.

Usually syndicates have a lead investor who makes final decisions and communicates with the investee company on behalf of the syndicate. The other members of the syndicate are often called follow investors.

When you’re new to investing, signing up to a syndicate can help you learn how equity investing works and avoid making costly mistakes.

As a member of a syndicate you can:

• pool your resources
• secure better deals
• diversify your portfolio
• make it easier to manage your portfolio

Investing in new and early-stage businesses is risky, including the risk that an investor might lose their investment. An investor should only invest if they believe they have the knowledge and experience to make their own decisions, and to understand and manage the risks associated with these investments. We recommend that investors seek independent financial advice before making an investment.

Read more in our post: What is a syndicate? How to invest as a group

For startups, having a syndicate invest in the company can be easier than having lots of separate investors. With just one point of contact, communications are streamlined. The company communicates only with the lead investor who represents the collective interests of the syndicate. Usually syndicates have established an efficient decision-making process so it’s much easier for the company to get resolutions signed off by a syndicate than by lots of separate investors.

Read more in our post: What is a syndicate? How to invest as a group

Usually syndicates have a lead investor - this person is responsible for finding deals, negotiating with potential investees, bringing in new syndicate members, and ongoing admin and comms with the group.

Other members of the syndicate - often called follow investors - can also take on some of these tasks but the lead investor makes final decisions and is ultimately responsible for communications, legal paperwork and liaising with investee companies.

Read more about the responsibilities of syndicate members in our post: What is a syndicate? How to invest as a group

SeedLegals Syndicate is operated by SeedLegals MPL (a subsidiary of SeedLegals).

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.

After your investment closes, SeedLegals MPL Nominees appoints the lead investor of your syndicate as our proxy in all communications with the investee company. This means that on behalf of SeedLegals MPL Nominees, your lead may:

• vote, attend, speak, ask questions and demand a poll at any general meeting of the investee company, as well as sign any members’ 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 or to SeedLegals MPL nominees specifically

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

The share certificate for the lead and follow investors’ shares is in the name of SeedLegals MPL Nominees. This is because SeedLegals MPL Nominees is the legal owner of the shares.

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.)

No. Our Syndicate service makes it much quicker and easier for you to invest as a group compared to setting up a special purpose vehicle (SPV).

Read more above: What’s the legal structure of SeedLegals Syndicate?

Our pricing is transparent, with no hidden extras.

SeedLegals Syndicate costs just £1,990 + 1% of the syndicate investment, capped at £10,000, plus VAT. This fee is paid to SeedLegals MPL by the investee company.

For example, if your syndicate invests £200,000, then the fee is £3,990 + VAT

You’ll have a dedicated account manager and unlimited help is included.

Interested? Book a call with one of our experts.

Take a look at the timeline above on this page: How to invest as a syndicate on SeedLegals and the instructions on this blog post: How to use SeedLegals Syndicate

Interested in setting up a syndicate to invest in a company on SeedLegals? To get started, book a call with one of our experts.

Yes, as long as the syndicate member(s) and the investment are eligible for S/EIS.

Talk to the lead investor of the syndicate about whether an investment proposal is eligible for SEIS/EIS. After the investment has closed, you’ll need to make sure the lead sends you the documents you need to claim the tax relief in your self-assessment tax return.

💡 Good to know: When you use SeedLegals Syndicate to invest in companies on SeedLegals, if the investment qualifies for SEIS/EIS, then eligible members of the syndicate can claim SEIS/EIS tax benefits.

Yes. Currently, you’ll create a SeedLegals Syndicate for each deal separately.

No - syndicate investments are for equity investments in funding rounds on SeedLegals.

Yes. To comply with the UK’s Financial Conduct Authority (FCA) regulations, SeedLegals MPL must carry out KYC (Know Your Customer) checks on every investor in your syndicate.

If you’re doing a funding round with multiple individual investors, you can turn them into one easy-to-manage entry on your cap table with a rollup on SeedLegals. Find out more: SeedLegals Rollup