Streamlining Private Markets
Morning everyone. I'm excited to talk to you today a bit more about one of my two projects that I have been working on as we look to the future of private asset investing. I have ben working with Jeremy Hitchcock and his family office, Orbit Group, over the last 4-5 month to develop a platform to help connect and streamline the processes between managers/dealmakers, limited partners, and the founders/operators that they back. Our mission is simple, there is growing interest from the world best capital allocators to help support amazing entrepreneurs and innovators out there, we want to remove the friction from that process to help drive more efficient markets and the next great generation of innovators.
You gotta start somewhere and at Syndicately we started with SPVs. Both in terms of functionality and their ability to provide access to a greater range of managers and investors, we believe that SPVs are an important vehicle for private markets and we want to take the pain points out of the process. To start, we focused on making it easier for fund/emerging managers and dealmakers to certify themselves along with accredited investors. At Syndicately we call these profiles, your profiles are all the details we need on file to both verify your identity and KYC you.
The objective here is simple, deals move quick these days and whether you are looking to run one yourself or get invited to invest in one, these profiles make it so we can fill out and file paperwork and funding quickly. KYC/KYB, or Know Your Customer/Business, is a set of standards that banks and financial institutions use to verify the identity of individuals or entities looking to open bank accounts or to move money and prevent money laundering. Each profile in Syndicately must pass KYC and then that status is checked continuously to ensure that you remain approved which you can see above. Once approved, you can sign subscription documents and submit funding to an investment opportunity in minutes. Fund managers can request a new SPV and we will get the LLC creation process started that day because we know that the person or entity taking these actions have met these standards and is cleared.
In speaking with several dozen managers, another major headache when deploying SPV is simple the oversight and management of investors coming in and where they are along the process. Investors have to complete several key steps when investing in an SPV and we made it easy for managers to quickly see where along the journey each investor is and built some quick and simple tools to help nudge them along.
In our investor capital table you have 24/7 visibility into the investors that have been invited to your SPV, their capital commitment amount, and a status. The status focuses on these steps including "Invited" - or the investor has been provided access to the deal deal details but has not yet made a commitment. "Docs Needed" - or the investor has made a capital commitment but has yet to sign and complete their subscription documents. "Funds Needed" - the investor has signed their subscription documents but have not submitted funding, and "Complete" - indicating that you have received their funding and all of the proper paperwork is on file.
Have a lot of LPs and lots of exciting deal flow? Our edit feature allows you to gather the ideal commitments from your investors and then you can manage and finagle them to all fit into the allocation you have secured. Oh and we have built a fee and cap table calculator that adjusts on the fly so you and your investors always know exactly how much they will owe (capital commitment plus fees) and we keep track of ownership interested on the fly. When you are ready to close, we produce a summary table for your records.
Syndicately SPVs also come with a deal page, data room and e-signature capabilities so you can easily produce and sign operating agreements, subscriptions documents, and private placement memorandums for all participants. With our data room you can upload documents, decks and other collateral from the investment opportunity.
So why Syndicately over AngelList and other platforms that offer SPV solutions? First is ownership. What a lot of these platform do is either directly participate in the deal economics via carry, but they also install themselves as manager of the LLC entity created for the SPV. With Syndicately, you or an entity you control managers all of your own deals and we never take carry or participate in the deal economics. We charge a simple per SPV fee that covers our service in helping you execute the deal as a third party. Why is this important? By making you the manager, you have complete control of your SPV entity. Should you need to take it off the Syndicately platform, you have that flexibility. These are your SPVs, managed by you, in your name.
So where do we go from here? We are excited and encourage by the early results of our SPV automation platform but there is still so much more infrastructure to build to help support and power private markets. While we are still discussing with customers and making decisions we are are looking at a few things we know are in demand. One, fund admin, any fund managers out there reading this, if you are looking for a better fund admin tool reach out as we would love to chat. We already have two funds who have put their name in to help us build a better fund admin platform on top of our SPV tool.
Second is more personalization, let dealmakers, funds, platforms and other take syndicately, white-label it and then use it as a standalone deal portal or embed it in their existing site. Think of us as the Stripe of private deal infrastructure.
Third is adding support for investment in a broader range of private assets. Debt, real estate, cryptocurrencies, etc. These assets require some very unique tracking and reporting characteristics which we will look to add throughout 2022. For the time being, for fund managers, angel investors, syndicate leads look for SPVs, we are open for business so give us a shout if you are interested in trying the platform!