Are late stage venture deals banked? How does the syndication process work?
When you see something like "DoorDash / Discord / Peloton (et al) raise $450mm at $900T post-money valuation)" is there usually a banker making this happen? Are these processes as painful as working with bankers on control transactions or are they slower rolls since everyone is getting in them together?
How does the syndication process work more generally, now that I think about it? Do all investors participating have the same terms (e.g., one investor is participating preferred, another is just plain old preferred)? Does one person take the lead on structuring (lead investor) and the rest agree / disagree?
Bump
interested
Main point is if these deals are chill to work on like early stage VC or if they are grindy and suck like LBO PE
Grindy and sucky. Especially when the capital structure becomes a rat's nest and the investors are locked in a spider web of many different rights and privileges.
There can be an investment banker or advisor involved, but a lot of those private placement deals are with people already in the founders/execs' network. When money is coming in from outside (as with an IB), the LP structure you describe is common and the ownership considerations (common, preferred, convertibles, warrants, or all of the above) could be anywhere and include anything. I think Crunchbase should have a lot of examples and information on this topic.
Thanks. At what stage is the overall investment process still cerebral and not shitty (eg seed is cerebral and not about grinding through jillions of documents and analyses forever, at some point this becomes lame like banked deals where there’s so much pointless work - or, if necessary, not fun work like endless cap table bullshit)
Probably only in the very early stages, which I do not have much experience with. I like that you call it "cerebral" though - is that because the focus is on strategy and the market at that point?
By the time they get to me, the work is all shareholder agreements and confidential offering memos and cap table bullshit. At that point they're like a dog that caught the car they were chasing and don't know what the hell anymore haha
Series A, maybe B. Definitely seed/series A but personally I don’t like venture that much compared to PE.
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