AP
Syndicate

Syndicate

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What is Syndicate?
  • They are building Web3-native tools to create and manage Investing DAOs
  • Syndicate is looking to simplify the DAO creation process with their first new product of “Web3 Investment Clubs”
  • Allows users the ability to form a DAO with the “peace of mind to maintain compliance and do the right thing for their members”.
  • Goal: Make forming these groups and investing in tokens and NFTs collectively as “easy as a group chat.”
  • Syndicate can transform any Ethereum wallet into an investing DAO, adding abilities like managing deposits in automated cap table, annotate transactions, add metadata, and more.
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What does their tool, “Web3 Investment Clubs”, do?

It allows anyone to create and manage an investment club on Ethereum in seconds.

  • An unlimited number of on-chain investment clubs can be created instantly, on-demand
  • Run as DAOs on Ethereum with a wallet (Metamask, Gnosis) and Syndicate’s smart contracts
  • Syndicate’s smart contracts automate management of deposits, cap tables, reporting, distributions, and more
  • Optional legal infrastructure enables legal entity creation for off-chain investments and supporting compliance
  • Composable with other Syndicate and Web3 infrastructure and tools
  • This tooling allows users to create a group of up to 90 participants

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What is an Investment Club?

An investment club is a group of people who pool their capital and make investments together.

A Web3 Investment Club is a group of people who pool their capital and make investments together in Web3 assets (e.g., ERC20s, NFTs, Web3 startups).

  • Up to 99 members (individuals)
  • All members must actively participate in investment decisions
  • No performance fees (a.k.a carry)
  • No public solicitation
  • Must not make, nor propose to make, a public offering of its securities
  • If investing in startup equity, members must be accredited
  • No transferability
  • Responsible for following laws and tax obligations

For additional information on investment clubs, read our FAQs here or the SEC's overview of Investment Clubs here.

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Types of members in Investment Clubs

Every investment club on Syndicate has two types of members: admins and members.

  • Admin(s): Individual (or group of people) who creates the investment club—they manage the club's wallet as well as the club's settings and members
    • When admins create an investment club on Syndicate, they will need to connect a Web3 wallet (or Gnosis multi-sig).
    • The wallet holds the investment club's funds, and Syndicate's smart contracts help manage the deposits, distributions, cap table, investment portfolio, and more of the club.
  • Members: Participants in the club who contribute funds and help make decisions on investments
    • Each member of the investment club will also need a Web3 wallet (e.g., MetaMask) to (1) deposit funds into an investment club and (2) hold the ERC-20s that represent their ownership stake in a particular investment club.
    • To clarify (2), every Investment Club will receive their own ERC-20 Club Token that is minted to represent each members' stake in the club. After making a deposit, members will receive a proportional amount of ERC-20s.
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What is the Investment Club Dashboard?

Syndicate's investment club dashboard is used to view and manage deposits, members, investments, and more. In the months and years ahead, Syndicate will be adding new Web3-native features, tools, and integrations to expand the capability range of investment clubs on Syndicate.

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Collaborations / Partnerships
  • Worked with Latham & Watkins to develop standard templates for investment clubs on Syndicate
    • So people can automatically and easily generate template documents that people can sign with their Web3 wallet before joining a DAO if they wanted additional legal protections
  • Partnered with a fintech startup called Doola
    • Enable DAOs on Syndicate to create legal entities, get bank accounts, file taxes, and more
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Why is this needed?
  • Syndicate is trying to demystify DAOs for more users like investors and create another path for users that have considered forming similar investment vehicles using more traditional non-crypto financial services.
  • They’re aiming to make clubs flexible for a diverse set of purposes
  • People want “piece of mind”.
    • They want some Web2 bridges to ensure that them, their DAO, and their members legally protected