In the world of angel investing, a syndicate is a term used to describe the temporary alliance of businesses that essentially join forces, created for the express purpose of making a single investment and is typically led by experienced investors, financed by sophisticated angels for the purposes of making sure that the job gets done properly. A couple of weeks ago, we organised New Nordic Leads lead angel training with two experienced angel investors, Annukka Mickelsson and Kristjan Raude, who shared their experiences on syndicating deals. Here are the key takeaways, and five tips on syndication.
- Don’t do it for the money, do it for the marriage
Angel investors are in it for the long run: the average time to exit is 7-10 years Like in every relationship, what makes it meaningful and successful are the shared values and goals. As Kristjan highlights; “You really need to like the team and business they are in. Don’t take it just as a financial number in your excel sheet, because they are real people, real human beings.”
- Choose your battles wisely
Investing enough time in due diligence and asking open-ended questions will help you in choosing the battles that you are ready to fight when things get tough. And in the startup world, they do get tough; “Compared with marriage, at the end of the day, if you don’t like the marriage you can get out. Maybe it will cost you some money, but you can still get out. It’s not so easy to get out of the cap table.” says Kristjan.
- Set expectations and focus on communication
Open communication is the key to powerful decision-making. “Make sure that what you are saying, the other party is actually understanding.” says Annukka, and continues by highlighting the importance of empathy: “Be empathetic about people around you, not everybody is similar to how they communicate or how they process the information.” If you are interested in enhancing your communication skills, you can hear more of Annukka’s thoughts here.
- Build trust and form a working partnership
Great leadership requires self-awareness and trust-building skills. Annukka describes the important qualities of a lead angel; “You need to lead yourself to be understood, and you need to give others room to be led. On the other hand, you are there together, this is not about one leading and the other one following, but this about forming a working partnership”
- Be the biggest help you can for a startup
As mentioned above, long-term thinking in angel investing is a must – In addition to this, Kristjan highlights the importance of being there for startups when they need the help; “As more value, you provide to the startup, that will influence your deal flow or the quality of your personal deal flow in the future.” Helping others is a great way of attracting good things in life, and creating an endless ripple effect.
Investor, interested in developing your lead angel skills, creating cross-border connections and finding potential investment cases?
Join our upcoming New Nordic Leads sessions for more insights and curated deal-flow:
New Nordic Leads Final Pitch on May 18th at 16:00-18:00
Lead angel training on due diligence on June 9th at 15:00-17:00.
New Nordic Leads creates cross-border opportunities by sharing best practices, educating lead angels, and improving startups’ investment readiness. This project is put together by FiBAN and EstBAN and is fueled by Central Baltic Interreg.
Johanna Ahtiainen, Training and Development Manager, FiBAN
Anu Oks, Managing Director, EstBANanu@estban.ee