“We are still exploring regulatory clearance to do syndicates in India.Unfortunately , nothing is imminent,“ said Ravikant in an email response to queries from ET.
“If we do get regulatory permission to operate in India, then this money can go into Indian startups as well. It’s not geographically limited.“
A syndicate allows investors to participate in a lead investor’s deals. In AngelList, syndicate investors don’t invest directly in a company but in a special purpose fund that is created specifically for each investment. This fund then invests in the company . The corporate form of the fund is a limited liability company in United States.
Syndicates also facilitate online closing and tracking of deals. “Closing deals online is not legal in India, and the amount of money it takes to invest through a special purpose vehicle is not economical“, said Sanjay Mehta, a full time angel investor.
“In India, syndicates only mean aggregating investors together for a deal,“ he said, adding that the shareholder’s agreement is the only document that can be upheld in a court of law. In India, online deal-making platform like LetsVenture and ah!Ventures facilitate deal discovery online, but still rely on offline methods to close deals.
Only Globevestor, which is a USincorporated entity closes deals online. Typically syndicates are like smaller funds, led by re puted angel investors, whose judge ment on startups is valued by peers. Ravikant said the fund will back only syndicates, deal by deal, and put up to 25% of the round. The fund would invest in technologyfirmsintheearlyandseedstageover he next five to eight years, said Ravikant. Over 650 startups including Shyp, Sprig and Luxe have raised $205 million from syndicates.