Venture Financing:

Business Angels

Business Angel Syndicates


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The last few years have seen a dramatic increase in the number of business angels who are investing as part of an investment syndicate, an approach that allows them to collectively make larger and more frequent investments. More experienced investors tend to prefer such co-investment groups. These are large groups of angels, sometimes with as many as 100 members, that operate through forums. There are today about 30-40 of these alliances around the U.S. and more are forming. They usually meet regularly, and deal origination and outside access to the group is typically through one or more of its members. To retain members' anonymity, many of these syndicates (also called angel alliances) establish a storefront (or facade) for the general public.

Angel syndicates offer investors clear advantages:

  • Pooling money to invest in larger deals otherwise out of reach

  • Diversification across multiple investments

  • Leveraging and sharing of network contacts and investment expertise (such as screening, due diligence, valuation, and monitoring)

  • The ability to add more investments to an existing portfolio

  • The ability to add further follow-on rounds to existing investments.

However, these syndicates also incur certain running costs and may not be appropriate for those investors who wish to have a large say and active involvement in their investments.


Typically, a member of the group brings a particular investment opportunity to the attention of the syndicate, on the understanding that the member will invest in the deal. The deal is then evaluated by the group in a venture forum.

Each member can decide individually whether to participate in a particular deal that the syndicate decides to undertake and how much he or she wants to be involved in each investment they make. Once such a commitment is obtained, the participating angels have to supply the funds within a certain timeframe, usually thirty to sixty days, as needed. Larger and more complicated syndicates often look for opportunities with broader and deeper markets and higher minimum return requirements than simpler syndicates do.

In most cases, one member of the syndicate acts as the lead angel, assuming a liaison role between the entrepreneur and the syndicate. In other cases, an outsider with no financial commitment to the group (known as an "archangel") is hired to perform this function. These individuals may be responsible for performing due diligence and coordinating the allotment of investment duties among members. Syndicate deals tend to be more professional than the average business angel deal.


  1. "The Early-Stage Equity Market in the USA", by Sohl,J.E.

  2. "The Formation and Organization of Mega-Angel Syndicates", by Mayfield,W.M. and Bygrave,W.D.

  3. "Angel Investing", by Osnabrugge, M.V. and Robinson, R.J.

  4. "Seed Investing as a Team Sport", by National Association of Seed and Venture Funds (NASVF),