Introduction — Club Deal 101
A few months ago, I shared my thoughts on Club Deal investments, specifically on how they can bring value to both investors and club administrators. More recently, eFounders’ co-founder Quentin Nickmans explained how Club Deals are a great financing solution for some Venture studio models and how to finance a Startup Studio.
We’ve received a lot of great feedback since the articles went live. But one question kept on popping up: how can we get started on building a great club of investors?
Using Quentin’s extensive investor experience operating the eClub and insights from our customers at Zenvest, we’ve assembled the key ingredients to build a Club Deal.
First, what is a Club Deal (also known as a syndicate)?
- A limited community of investors (i.e. members),
- Run by one or more Club Managers who curate and propose private investment opportunities
- It allows each member to decide whether or not to invest in each opportunity
With this in mind, private banks and multi-family offices who analyze and suggest “special private equity placement opportunities” of clients operate as a Club Deal. Their number of clients/investors is limited and the private bank or family officer is the Club Manager.
This definition excludes organizations like AngelList or FundersClub that are open communities with unlimited members and therefore closer to crowdfunding platforms. This also excludes platforms that connect entrepreneurs with investors that operate without an intervening Club Manager.
For us, the leadership of Club Managers is pivotal. They present club members with investment opportunities that are tailored to their needs in a fully transparent way.
Taking this all into consideration, we can summarize the key ingredients for building and running a successful Club Deal in 4 points:
- A limited number of targeted & active investors
- Clear and transparent opportunities
- Admin involvement
- Post-investment Transparency
These are best practices for starting, operating and ultimately growing a Club Deal.
These are best practices for starting, operating and ultimately growing a Club Deal.
We will unpack each of these key ingredients in a series of articles which will be released in the coming weeks. Stay tuned!
In the meantime, if you’d like to find out more about zenvest.com, please contact me at cyril@zenvest.com
