The Nucleation Syndicate network
A syndicate is a vehicle for pooling smaller investors together into a single entity. Nucleation Capital will ocassionally form a syndicate for deals we have diligenced for our fund to enable both existing fund subscribers and members of our broader pronuclear investor network to add capital to select ventures at reduced cost.
If you are interested in hearing about these investment opportunities, please join the Nucleation Syndicate nework. There is no cost to join or obligation to invest, it’s just the way to get on our AngelList outreach list. You must be an accredited investor to participate but the minimum investment is only $1,000.
Not every deal that we invest in through our fund can or will be syndicated. When we are able to obtain additional allocations of equity, however, we will offer that opportunity as a benefit to our investors and our broader syndicate network. We fill these allocations on a first-come, first-served basis at the same valuation that we invest in with our fund. Existing subscribers may choose to participate to increase their holdings in select deals. Investors who are not fund subscribers may participate to gain exposure to our vetted advanced nuclear deals.
We are showcasing our available syndicated offerings below and have answered additional questions in the Q&A section that follows.
Open Syndicated Offerings from Nucleation Capital
What is a syndicate?
An investment syndicate is a group of accredited investors. Their funds are pooled together into a special purpose vehicle (SPV) by a lead investor, in this case Nucleation Capital, to simplify closing a larger number of investors into a single venture deal. In this way, each investor owns that percentage of the SPV that is the proportion of their investment to the total raised by the SPV. SPVs provide dramatic cost savings on what would be prohibitive legal fees for smaller investors operating independently and higher legal costs for the venture itself.
How does syndication work?
Nucleation Capital will select opportunities, write up a deal memo summarizing information about the venture and direct AngelList to incorporate the special purpose vehicle (SPV). We will then send an invitation to network members about the opportunity. Each investor will receive a link that allows them to read our deal memo and decide if they’d like to participate. There is never an obligation to invest. There is also no guarantee that there will be sufficient allocation available. The minimum to participate in any SPV is only $1,000 and is a one-time event. This low “ticket” amount makes select Nucleation deals affordable for more investors.
What are the fees for investing in the syndicate and how do they differ from the fees for the rolling fund?
There is no cost for joining our syndicate and receiving our confidential deal memos. Additionally, Nucleation does not charge a management fee on syndicated deals, since we have already done the vetting work for our fund. There are two types of fees that do apply to syndicates, however. The first is the SPV set up fee charged by AngelList, which covers the incorporation costs and any state jurisdictional tax that applies. This fee is deducted from the total principal pro-rata across all investors by AngelList. The second fee is a small carried interest (“carry) fee that will only be paid to Nucleation Capital when the investment returns proceeds beyond the principal amount invested in the future. This serves as a success fee to Nucleation Capital as the lead investor. (Note: Nucleation Capital does not act as a broker or finder and is never paid by founders.)
What’s the difference between investing in Nucleation’s rolling fund versus the Nucleation syndicate in terms of deal access?
Rolling fund subscribers have automatic pro rata participation in every deal the fund invests in. Not all of the deals the fund invests in will be syndicated. When a syndication is possible, fund subscribers have priority to take the available allocation. Only thereafter is the remaining allocation made available to those participating in the syndicate. Thus, syndicate members may not have access to every deal and may have limited allocation available in certain deals.
How does Nucleation decide whether to invest in a deal through its rolling fund or through its syndication?
Nucleation Capital invests first on behalf of the fund, seeking as much allocation as the fund determines is best. We only syndicate those deals that the fund invests in, which have additional allocations of equity that remain available. Nucleation’s syndication offers go to existing fund subscribers on a priority basis (and reduced carry). Only after they have had an opportunity to invest more, is the SPV shared with syndicate members so long as sufficient allocation is available.
Why can’t all deals syndicated?
Early stage equity tends to be the most expensive equity, so founders naturally want to limit the amounts that they raise early on. As a result, some deals generate more investor interest than what the founders want to raise. These are “over-subscribed” deals and these never offer extra allocations for the purpose of syndication. In other instances, founders disclose very sensitive and confidential information and require that this be protected by Non-Disclosure Agreements (NDAs) that are signed by Nucleation Capital. For these ventures, they may not provide allocations for syndication because it is not feasible to obtain the level of NDA protection that they prefer. Sometimes the timing of a deal does not permit the formation of a syndicate or we do not have the bandwidth (such as a quarter end).
What is carry?
“Carry” is short for “carried interest” which is a share of the deal’s net profits. Carry for most syndicated deals is 20%. Carry is paid when the deal returns proceed in excess of the amount invested by the LPs. This is a “success fee” paid to the deal manager as upside reward for its selection of good ventures and for managing the SPV.
How many deals will I see through the syndicate each quarter?
You can expect to see one or two syndicated deals per quarter over the coming year. As our fund grows, we expect the rate of deal flow to grow over time.
Can I participate as a foreign resident? Can I participate if I am not accredited?
Yes, you may participate as a foreign investor however, you need to be able to meet the US SEC accreditation requirements through the submission of evidence of income or assets.
Will the names of those who invest in syndications be disclosed publicly or appear on the venture’s cap table?
No. Syndicate participants remain confidential and are not disclosed by Nucleation Capital. Cap tables list ownership as the “Nucleation Syndicate” with just a few exceptions (such as when required by law with large investors who provide more than 25% of the total or for FIRRMA or CFIUS reports).
Why haven’t I heard of investment opportunities like this before?
Syndications have been around a long time but technology has only recently made it both affordable and accessible. Previously, only those who worked in banking, finance, or venture capital could access these types of deals. Now, nearly all accredited investors can afford to participate in a range of private equity opportunities. Nucleation Capital is particularly working to build a network that brings nuclear-related deals to qualified accredited investors whose careers have been in industry, engineering, or energy and others who appreciate its importance for our future energy security.
Join the Nucleation Capital syndicate
Joining our syndication network means that you create an account at AngelList which will send you our notifications about the select investment opportunities we offer. There is no obligation to invest. Should you choose to invest in a syndicated deal, you will be able to do so directly through the AngelList portal where you can review and sign the deal docs and wire your payment. Your account at AngelList will track your investments, funding, management reports, K1s and investment performance for the duration of these investments.