beel Launches Syndicates for Angel and Co-Investments

The fundraising platform beel, formerly Tokenize.it, is expanding its offerings to include investment syndicates. Experienced business angels can use the platform to build their own investment communities, share selected startup deals with other investors, and, if the investment is successful, earn a carry fee on those investments. At launch, syndicate leads include Andy Bruckschlögl, former HTGF Managing Director Alex von Frankenberg, and serial entrepreneur Roland Fassauer, among others.

Opening Angel Deal Flow to More Investors

With this new feature, beel aims to make a mechanism from the international angel and venture capital landscape accessible to a larger group of investors. At the center of this is the so-called syndicate lead. This is typically an experienced business angel who identifies interesting startups and presents them to their investment community.

The lead can decide who is allowed to join their syndicate and whether it is run publicly or privately. In both cases, investors must be individually approved.

This gives even less-connected investors access to a pre-screened deal flow that previously often took place within small angel networks. Instead of reviewing a large number of pitch decks themselves and building the necessary contacts, they can rely on the pre-screening done by experienced investors. However, the final investment decision remains with each individual investor.

Not a Traditional VC Fund

The key difference from a traditional venture capital fund lies in the structure. At beel, the capital of participating investors is not pooled into a single fund. Instead, each participant decides for themselves whether and to what extent they wish to invest in a presented startup. The investment is then made individually and directly via the virtual shares offered by beel.

According to the company, this eliminates the need for the structures required by traditional funds and reduces some of the associated administrative burden. beel thus positions syndicates as a streamlined alternative for investors who want to invest collectively without having to set up their own VC fund. The syndicate lead acts as a source of information or provides an investment recommendation. The decision regarding the investment and its amount remains entirely with the respective investor.

Carry for the syndicate lead

For experienced business angels, the model also opens up a new opportunity to monetize their deal flow. When joining a syndicate, investors enter into a contract with the respective lead. This contract specifies a carry fee, the amount of which is determined by the syndicate lead. In the event of success, this fee is due upon payouts, such as following an exit or upon the distribution of dividends.

This allows angels not only to profit from successful startup investments with their own capital but also to participate in successful co-investments made by their community.

Strong, experienced investors can earn carry fees through their well-curated deal flow without needing a fund to do so.

Christoph Jentzsch, beel Founder and CEO

At the same time, new investors wouldn’t have to wade through hundreds of pitch decks themselves but could access pre-screened companies. Jentzsch expects this to provide additional leverage for private capital in the startup ecosystem.

Three familiar faces are launching their own syndicates

To launch the new offering, beel was able to secure three investors as syndicate leads.

Andy Bruckschlögl is a co-founder of Bits & Pretzels and several other companies and has been active as an investor for more than 20 years. Alex von Frankenberg led the High-Tech Gründerfonds for many years and is now a partner at May Ventures. The third lead is Roland Fassauer. According to beel, the entrepreneur has overseen two IPOs, is a professor at CODE University, a general partner at Outlier VC, and has invested in more than 80 startups.

In the future, selected startup investments will also be made available to other investors through their syndicates.

Virtual Shares Instead of Entry in the Commercial Register

The technical and legal basis for the investments is the virtual shares already in use by beel. These are based on specially structured profit-sharing rights that allow investors to hold an economic stake in a company without being listed as shareholders in the commercial register.

According to beel, this allows startups to continuously bring on new investors without having to go through a traditional investment process involving a notary appointment for each investment. The profit-sharing rights are represented in the background as tokens on a blockchain. This is intended to make the investments tradable on secondary markets in the future. In addition to startup fundraising, beel also offers employee stock ownership plans and its own secondary market based on this model.

Co-investing is set to become easier

With these syndicates, beel is expanding its business model from the technical processing of individual startup investments to the organization of investment communities. For experienced business angels, the main advantage lies in making their own deal flow accessible to a larger group of investors and receiving carry on successful investments. Co-investors, in turn, gain access to curated investment opportunities and can decide for themselves whether to invest in each deal.

beel itself acts as a contractually bound intermediary within the meaning of the Securities Institutions Act and conducts investment brokerage on behalf of and under the liability of Concedus GmbH.

Whether syndicates can actually become an alternative to smaller VC funds will likely depend above all on whether beel succeeds in consistently bringing attractive leads and their deal flow to the platform. With three experienced investors at launch, the company is at least laying the groundwork for this.