How do I create a syndicate?

Sign up to access your Investor Network Profile (INP) in 3 minutes or less. Once your account qualifies – you can immediately launch your Business Network Page ( BNP) and set up Syndicates. For this, you must answer the required questions and work with our Investor relations team to get your Syndicate up and running on the Crowdfunding Capital Network (CCN).

What is the minimun amount of investment in a syndicate lead?

Ordinarily, Syndicate Deal Leads must invest a minimum of $1000. However, you can either invest directly in a Syndicate or partner with a Syndicate to invest in a Portfolio vehicle. Lilypads recommends Sponsors invest at least 2% of the allocation, that is $10,000.

What are the requirements for starting a syndicate? 

To Syndicate your first deal, you must:

 

  • Invest in each deal
  • Provide a detailed thesis that includes your goals and preferences
  • Assess and resolve past conflicts of interest, if any, along the lines of investments, warrants, advisory shares, etc
  • Analyze and scrupulously screen potential Investors in each deal through KYC/AML and Certification through the Lilypads Platform 
  • Sign a side letter that makes you an independent Contractor of the Fund’s Investment Consultant. Therefore, you must also provide adequate, accurate information to every query of the Investment Advisor.
  • Clarify every possible reservation and concern that the Investors might have regarding their Investments.

Can I use Lilypads to expend my LP Network?

Even in the absence of a strong LP network, you can use Lilypads to run a deal. However, our setup costs are $9,000, whereby we can organize a Syndicate within 2 weeks. 

 

Also, you can qualify for participating in Crowdfunding opportunities from our Crowdfunding Capital Network (CCN) that consists of active, accredited Investors.

How can I build my LP network?

If you choose to create a Public Syndicate profile, LPs can directly connect with you via our Searchable Opportunity Directory or through your Public Syndicate Profile page name. On the other hand, if your deal becomes eligible for our Crowdfunding Capital Network (CCN), these sophisticated LPs may also sponsor your Syndicate personally after they receive an invite to invest in your deal through the Lilypads platform.

If I choose to raise on Lilypads, is it public/general solicitation?

No, they are not. Typically, all the deal offerings in the Lilypads platform are private and target high net-worth, sophisticated Investors. Hence, they are a part of the 506(b) and 506 (c) regimes. So, such deals are NOT akin to public fundraising under Reg A.

Is my syndicate public?

You can decide if you want your Syndicate to be Public or Private. If your Syndicate is public, LPs may find your Syndicate via the Searchable Opportunity Directory or through your Public Syndicate Profile page. 

 

In case you choose to keep it private, LPs will not be able to locate your Syndicate. It is only if your deal qualifies for exposure to our Crowdfunding Capital Network (“CCN”) that you will qualify for sending direct invites to the LPs for your deal through our Platform Capital Invites.

What information can the LPs view when applying to my syndicate?

LPs can search and browse all public Syndicates on their Investor Network Profile ( INP) Dashboard. Once they seek additional information on your Syndicate and click for more, they will be able to view your Stats, Portfolio, Deals, and Pitches to Investors.

Can my Private Equity fund create syndicate?

Yes, both Individuals and private Equity funds can form Syndicates.

If your fund comprises LPs, the LP agreement must permit the creation of a Syndicate.

Any carried interest from a Syndicate deal can be divided and distributed to your fund’s GPs and LPs.

What is the legal framework of a syndicate?

A Syndicate is generally organized as a Special Purpose Vehicle (SPV) Limited Partnership. The Fund’s Sponsor operates as the General Partner or GP and the Investors are Limited Partners (LPs) or passive entities.

 

To avoid any impasse between GP and LPs, the LLC Operating Agreement or LP Partnership Agreement establishes the terms of Legal Formation, Voting Rights, Distribution, Sponsor fees, etc.

 

Generally, Syndicate Investors do not directly invest in a vehicle. Instead, they invest in a Special Purpose Fund that is created exclusively to invest in a vehicle. The fund is formed as a series LP.

What is the legal framework of a spv?

A Lilypads Special Purpose Vehicle (SPV) constitutes various associates including Legal General Partner, Investment Advisor, Administrator, etc. They are responsible for a multitude of tasks that includes and are not limited to managing Legal Formation, KYC, Accreditation, Collection of Funds, Signatures, Distributions, Capital Calls, Tax Documents, and other back-office tasks. Furthermore, there are several fund manager-affiliated entities who are in charge of other legal assignments for the SPV.

This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.

Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.

What can I edit in my Syndicate profile page?

You can edit the following information on your Syndicate profile page:

 

  1. Syndicate name
  2. Syndicate URL
  3. Privacy
  4. High concept pitch
  5. Longer pitch to Investors
  6. Default carry per deal
  7. Minimum LLP investment per deal
  8. Expected deals per year
  9. Deal flow summary
  10. Investments
  11. Order of references
  12. Order of LPs