What Are the Charges for AngelList Indian Syndicates?
Investing in Indian Syndicates through AngelList involves specific charges primarily borne by investors, covering deal carry and out-of-pocket expenses. These costs ensure the platform's operation and compensate the syndicate leads for their efforts in finding and managing investment opportunities.
Understanding AngelList Indian Syndicate Charges
AngelList facilitates venture investing by allowing a lead investor to identify a promising deal and enabling other investors (backers) to participate alongside them. For Indian Syndicates, the cost structure for investors is clearly defined, comprising a share of any investment profits (deal carry) and direct operational expenses.
Here's a breakdown of the typical charges investors encounter:
| Charge Type | Description | Rate/Cost | Payer | Recipient |
|---|---|---|---|---|
| Syndicate Lead Deal Carry | A percentage of the profits generated from a successful investment deal. This amount is paid to the syndicate lead, who is responsible for sourcing, vetting, and managing the investment opportunity. It serves as an incentive for identifying quality deals. | Typically 0-15% of the deal's realized profits | Investors | Syndicate Lead |
| AngelList India Deal Carry | A portion of the profits from a successful investment, paid to AngelList India. This fee covers the platform's services, administrative support, and the infrastructure provided to facilitate the syndicate investment process. | 5% of the deal's realized profits | Investors | AngelList India |
| Out-of-Pocket Costs | Direct expenses associated with the execution of each investment deal. These costs often include legal fees, compliance expenses, and other administrative expenditures necessary for the transaction. These are calculated based on the deal size. | 2% of the deal size, up to a maximum of ₹5 Lakh | Investors | Various service providers (e.g., legal firms) via AngelList |
How "Deal Carry" Impacts Returns
"Deal carry," also known as carried interest, represents a percentage of the profit generated from an investment. For instance, if a syndicate invests ₹100,000 and the investment grows to ₹200,000, resulting in a ₹100,000 profit, the deal carry percentages would be applied to this ₹100,000 profit. This model aligns the financial interests of all parties involved: investors, syndicate leads, and AngelList India.
Important Considerations for Investors
Investors should carefully consider these charges when evaluating potential returns from syndicate investments. The out-of-pocket costs are capped at ₹5 Lakh (₹500,000), which provides a predictable upper limit for these direct expenses, especially for larger investment amounts. For further details on the specifics of these charges and other related information, investors are encouraged to consult official AngelList resources.
