Syndicately ’s Post

Transcript

Hi, my name is Max Avery. I handle business development for Syndicately. Our company provides the creation and management of special purpose vehicles, or SPVs, for 506(B) and 506(C) investment deals. We also provide tokenization of those assets. Our clients range from founders raising capital for their startup to investment professionals with family offices, angel investors, real estate, private equity, and venture capital. I'd like to walk you through a brief presentation on what exactly it is we do. We have here on the first slide that we are pioneering a new era of private investments where every transaction is as smart as it is swift. What does that mean? Syndicately has worked to build a platform that is as accessible and easy to use for someone that is brand new to running a deal and brand new to investing in private markets to large scale enterprise operations. We have a number of organizations that are already running SPVs and have been doing this for years. So at Syndicately, we want to change the way that investments work fundamentally by opening up these markets, but also allowing greater liquidity and greater access to all different types of verticals across private markets investing. So advantages of using a special purpose vehicle. So SPVs serve as a flexible and customizable target investment vehicle. They are suitable for many types of investments. So you see a lot of cases where people are using SPVs. And SPVs for real estate deals, for mergers and acquisitions, you will see people put SPVs together for aircraft, all different types of things because they allow for fractionalized investment in an asset and it's a direct investment into a specific asset. So we have a few bullets here to run through. Increased capital access because SPVs open up the market to more investors that can fund those deals. Fast formations. SPVs can be formed quickly. They don't require the. Same level of regulatory work on the front end. So you can get to raising capital and closing a deal more swiftly than someone raising a traditional fund targeted investment, as I mentioned, is that SPVs allow investors to put capital into a specific project that they want to invest in directly rather than just a fund pieces. You can build a track record as an SPV manager. So being a GP in these types of deals, you can attract investor limited partners to these deals. And once you have wins and you can start putting down. These were deals that you were a lead on is that that's something that if you want to move into a full scale fund in the future, you'll be able to use that as a resume, essentially. So deal by deal profits, which is an attractive thing to both GPs and investors. You as a GP would make money through carried interest. Typically in this, you can set that as part of the process and creating your SPV on the Syndicately platform. And there's established regulatory guidelines for SPVs. So this is not something that that just popped up overnight. There. Are clearly established rules for how to conduct businesses in SPV, SPV management challenges. This is a story as old as time that there are lots of great ways to do things, but they take a lot of work. They can be tedious and it's extremely time consuming and difficult to scale. What we have noticed in this is that private markets are continuing to develop. There's more people interested in private investing, but the workload that gets put on. And GPs that are successful deal leads can be a real challenge to manage if you're doing it all manually. So a few points is that there are risk of errors. That's something that if you have a tremendous amount of paperwork, it becomes more and more common that people will make mistakes while they're trying to get through large amounts of documentation in something. There's lots of boxes to fill in and more room for error. That is time consuming. As I mentioned, there's just a lot that goes into forming an entity and setting up an entity to begin with. Raising that capital. Collecting the capital. Deploying the capital and then managing everything on the back end of that, including the taxes at the end. So the process itself can be rather costly just due to the manual processes involved in the different professionals that one would typically have to involve in putting this entire deal together from scratch. As you know, you're going to have attorneys, CPAs, all your different filing fees and everything else involved. It can add up on the front end to be fairly significant and potentially cost prohibitive for someone. That's. Just starting to get into putting a deal together for the first time. There's also monitoring challenges, so it can be difficult just to maintain visibility, especially if you have a lot of limited partners involved in a deal. You know, just making sure that you have all of your your KYC checks and your anti money laundering checks in place, keeping track of everyone's contributions, managing the cap table, putting all that together. There's just a lot of reporting that going through and doing this as a manual process can be a bit challenging to handle, especially at scale. So liquidity limitations are also something that comes into play. There are not many options to provide liquidity to LPs once they are locked into a deal. Once LPs invest, it can be something that they are locked into that for a significant period of time waiting for whatever that liquidity event is on the back end of a deal. So it can be prohibitive for some people to get involved if they do happen to have a situation where they need to get out of a deal to be able to manage their own liquidity. And also may. Prevent them from wanting to get involved in a deal on them in the beginning if they are uncertain of where they are going to be in five years from now with that. There's also some regulatory and security challenges. You know, even though there are guidelines that are put in place, there's a lot of paperwork involved in that. And then also privacy and personal information has to be taken into consideration for managing all of these documents as well. So security has to be maintained for the investors sake. Make sure that all of their personal private information. So what the private market growing the way that it has in recent years, there's a lot of people that are coming into this space that see the inefficiencies of traditional workflows and understand the limitations of being able to scale their operations by using those traditional workflows. And so as a result, the need to simplify and accelerate those processes has become more and more urgent as time has gone on. Our solution and the reason that we designed Syndicately was. To provide a more streamlined, comprehensive way to manage a deal, set up a deal and keep everything organized and straightforward so that you can focus on what matters and getting the deal done for managers and dealmakers. It simplifies investment creation. It allows you to customize your documents. If you want to bring in your outside legal counsel to add some modifications to the templates that we provide, you can establish your own customized carried interest. Easily invite your investors. To onboard into the platform and then manage the outgoing payments through distributions and in tax documents as well for investors, they will be able to easily track their investments and move investment capital themselves. And in doing so, that's going to be, if they need a document, they can log in and pull that off of the deal room very easily, rather than having to contact you as the general partner. Every time they need some of that information, they'll also be able to complete their own KYC checks and execute those documents using an e-sign portal. So the documents can be signed online and we also have an online notarization service so they can handle that signing really wherever they are in the world. For startups and founders, they will be able to maintain a clean single entry on their cap table and also manage that round of their raise much more easily. Here's a few bullet points on what Cyndaquil addresses is really demanded by the market in order to make running SPVs a more scalable operation. So as. We handle all of the account creation and create the entity, create the EIN, and also create the bank accounts. So that is something that the general partner won't need to go outsource those. And it's also going to be a very simple process to work through the dashboard to get that going. User management is streamlined by allowing just an invite link to join a deal. When the partners go put all of their own information in and link their, their financial accounts themselves. And they will be able to have that portal into the deal room and make everything very straightforward when it comes time to call back capital as well. The data rooms themselves allow you to share your diligence materials, deal document updates. As I had mentioned previously, the online e-signatures and electronic notary services, all of this makes the paperwork and signature process much simpler than in previous times of having to go chase down signatures and get people to go do the notarization in person. Banking and flow of funds, as we were talking about. Having these accounts linked allows all of this to happen online, where it's very simple for people to transfer funds into the Omnibus account that the SPV has, and then deploying that capital from the entity's account to close whatever your deal is. We're also really excited about the ability to offer tokenization of these SPVs. So we have established a direct corridor into R3 Corda. And are working with them to provide a tokenization solution so that people will be able to create fractionalized tokenized SPVs that they could then go sell on a secondary marketplace. The regulatory compliance component of this syndically handles all of the necessary documentation. So there will be a much more straightforward process in filing these SEC documents. So in doing this in our system, the user really doesn't have to have, you know, any. Prior experience with getting these documents completed. It's very straightforward and easy to understand for completing all of the regulatory compliance documents that come along with that. And then another big one is predictable cost. So syndically is designed to be free upfront. And that allows people to create their entity, create their deal room and get their limited partners and invitation to come join the deal and get in the deal room. Before there is ever anything charged. We do have pricing structure on the back end of this deal. So that way when the deal closes and funds are transferred, then that is when syndically takes its fee. It's very easy to determine what the costs will be for a general partner. So that way they can build that in to what their model is in determining whether they want to go after a particular investment or not. And so again, to reiterate. The main reason that we did. We developed this platform and have built it the way that we have is to make this a process where you, when you're leading a deal, are able to focus on that deal itself, managing the deal properly, not chasing paperwork and getting distracted with all of the other things that go along with the capital race process and running an SBV. So this is really a tool to buy back some time and buy back the focus. And in doing so, hopefully allow you to scale your own operations. In a better way and spend your time more appropriately on things that matter to you. So that's it. We appreciate you taking the time to review this presentation and look forward to speaking with you a little bit more. If you'd like to talk to either Jake or myself, I have both of our email addresses here. You can reach Jake at [email protected], or you can email me at [email protected]. You can also visit us on the website and send us a message through the contact form there. Thanks again. Have a great day.