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What Is StartupRunner's Investor Syndicate?
An investor syndicate allows investors to participate in a lead (StartupRunner) investor's deals. In exchange, investors pay the lead (StartupRunner) carry. Syndicate investors typically agree to invest $100K-$250k total and pay StartupRunner a 10% carry for organizing, closing and managing the investment. If the investment is successful, the syndicate investors first receive their principle investment back, after which every dollar of the syndicate’s profit is split 90% to the syndicate investors, 10% to StartupRunner. StartupRunner Capital, LLC is a venture capital exempt reporting advisor with the Securities and Exchange Commission.
Entrepreneurs don't pay for syndicate investments. Syndicate investors pay 10% deal carry to the syndicate lead (StartupRunner). Carry is the 10% share of the profit of an investment that is paid to StartupRunner. Investors pay carry to StartupRunner only on a profitable investment. StartupRunner's syndicate uses deal carry instead of a traditional venture fund structure so that investors can pick and choose the investments they want to fund.
StartupRunner utilizes a deal structure which allows for syndicate investors and entrepreneurs to evaluate the acquisition or IPO potential of a business. After 4 years to determine if the business will continue to grow, but not at an exponential pace - the syndicates equity investment can be returned two times the principle. Focus on profitability allows for even businesses that stay small to return an investment both for the entrepreneurs and StartupRunner's investor syndicate.
Syndicate investors don't invest directly in a company. They invest in a special purpose fund (LLC) that StartupRunner creates specifically to invest in the company. The fund is managed by StartupRunner Capital, LLC. StartupRunner has developed a standardized set of legal documents which serves to decrease closing costs and difficulty in managing each syndicated investment.