March 8, 2021
In "Angel Investing Tips"
Today marks a great milestone at Propel(x) with the introduction of Propel(x) Syndicates. Propel(x) Syndicates make it easier for angel investors to invest in a broad range of startups by lowering the minimum investment required on our platform from $25,000 to $3,000. Propel(x) Syndicates, also known as LLCs, remove the need for an individual to act as a manager in angel investing syndicates, which lightens some of the administrative burdens associated with angel investing.
Providing many paths for angel investors to invest in science and technology companies is one of Propel(x)’s key objectives and Propel(x) S is the first step in providing the angel community with many ways to be involved in angel investing.
Syndicates have some distinct advantages for angel investor including:
Allowing more angels to invest in more companies
With the Propel(x) Syndicate the new minimum investment is $3,000. With this lower threshold, many more angel investors now benefit from access to a broader range of early-stage investment opportunities.
We often get asked how best to get started as an angel investor. Angel investing is a risky proposition and most financial professionals recommend that only 5% of a portfolio be invested in alternative investments like early equity investments in startups. On top of that, professionals recommend investing in multiple start-ups — some recommend as many as 20-30 to be sufficiently diversified.
Diversification is essential in early stage investing, and for many qualified, accredited investors, the $25,000 investment threshold for a single investment proves to be a barrier to building a portfolio with a large number of startups. By lowering the threshold, angels find investing in early-stage startups more accessible, allowing them to achieve a more diverse investment portfolio.
Streamlining the management, communication and administration
Propel(x) Syndicates takes care of all of the required paperwork to form and manage a limited liability company (LLC). The LLC will be passively managed, streamlining all of the required filings, as well as taking care of all investor communications for angel investors participating in a syndicate.
The ability to have professionals take care of the logistics and administration helps investors streamline their angel investing and more efficiently invest.
If you’re interested in learning more about Propel(x) Syndicates, please refer to our FAQ. And as always, feel free to reach out to us with any questions you may have.