Nucleation’s Pronuclear Investor Network
As the first venture fund investing primarily in advanced nuclear and deep decarbonization, Nucleation Capital hosts what may be the only network of pronuclear investors. As such, we seek to provide increased access for many more investors to invest in truly exciting early-stage nuclear and carbon innovation investment opportunities.
Participation in the Nucleation syndicate costs nothing but will enable you to get our confidential invitations to participate in syndicated venture deals. Once you sign up, you’ll receive our detailed deal memos regarding current syndicated investment opportunities. You’ll be able to read the write up, ask questions and decide whether or not to participate. The best part, we are offer participation levels starting as low as $1,000, making participation in this rarified asset class more affordable for many more investors. It’s that simple.
Nucleation’s syndicate includes investors in Nucleation’s Fund I as well as other accredited individual investors who would like to pick and choose which opportunities to participate in. Previously, we only syndicated deals diligenced for the purpose of a Fund I investment, when there was additional equity available. Going forward, we will be expanding our offerings to include a broader range of deals to provide our investors (i.e. Limited Partners) with more options and choice. (Note: we are now hiring Venture Associates to help support this expansion.)
How Syndication Works
A syndicate is a group of investors whose capital is pooled in order to complete a deal. When a sufficient number of investors choose to participate in a deal we’ve offered, we’ll form a special purpose vehicle (SPV) to hold the equity purchased by the syndicate. We can then deliver one large check to the venture raising capital to minimize their legal and administrative burdens. This structure allows more investors to participate at lower levels. Each investor then holds a pro rata share of the ownership of the SPV that is proportionate to the amount they invested.
Syndications are quite common in the early-stage fundraising world (see this HackSummit listing of the top 20 Climate syndicates) but previously, they were considerably more expensive and exclusive. Today’s digital finance platforms enable more investors to gain access at reduced levels through online portals like Nucleation’s. Syndications make investing in climate solutions more affordable for investors but it also makes it easier for ventures raising capital to connect with a much broader array of investors at earlier stages.
To apply to join Nucleation’s investor network and receive invitations to participate in select venture deals, please click the below button. If you’d like to receive our quarterly newsletter, Nucleation Insights, please include your email in your comment at the end of the application.
NOTIFICATION: Starting in 2024, we will be syndicating a broader range of deals, including follow-on rounds and other deals that fall within our thesis. We are looking to expand our syndication team to support this effort. If you would like to learn more about venture capital and build your connections with intriguing founders building exciting ventures in advanced nuclear or deep decarbonization, consider joining our syndication team by learning more about our new Venture Associate position here.
Syndicate Q&A
What is a syndicate?
An investment syndicate is simply a group of accredited investors. Their funds are pooled together to acquire private equity to be held by a special purpose vehicle (SPV). Every syndicate has a lead investor, in this case Nucleation Capital, which sponsors the SPV to simplify closing a larger number of investors into a single 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.
How does syndication work?
Nucleation Capital and our affiliates search for and secure select investment opportunities. We prepare a detailed deal memo summarizing information about the venture. We then register the proposed syndicate with AngelList, which creates a deal profile page. We upload all of the required deal information allowing LPs to review the deal. Then we send invitations to syndicate members about the opportunity. Each investor will receive a link that allows them to read the deal details and decide if they’d like to participate. There is never an obligation to invest.
What are the fees for investing in a syndicate?
There is no cost to joining Nucleation’s syndicate to get access to confidential deal invitations. Nucleation does not charge a management fee on syndicated deals. AngelList’s costs of forming the SPV and paying state blue sky taxes are shared pro-rata by all investors. As the sponsor of the SPV, Nucleation is compensated only in the event of success through a carried interest (“carry”) fee paid to Nucleation Capital when the investment returns a net profit over and above the principal amount invested. The standard carry charge is 20%. (Note: Nucleation Capital does not act as a broker or finder and is never paid by founders for help raising this capital.)
How does Nucleation prioritize access to syndicated allocation among its LPs?
Fund I subscribers get priority access to all syndicated deals. Thereafter, if equity remains, Nucleation invites syndicate members to participate.
How does Nucleation decide whether to invest in a deal through Fund I or through its syndication?
Nucleation Capital invests first on behalf of Fund I, seeking as much allocation as the fund choses to obtain. If there is an additional allocation of equity available, Nucleation Capital will seek to syndicate that to its investor network. If a deal becomes available during a quarter in which Nucleation has already invested, Nucleation will seek to offer that allocation to its investor network through syndication.
Why can’t all deals be syndicated?
Early stage equity tends to be the most expensive equity, so founders naturally want to limit the amounts that they raise early on. Some deals generate more investor interest than what the founders want to raise. Such “over-subscribed” deals rarely allow syndication. Some founders decline to syndicate because of the nature of their confidential information. Other times, a round is closing too quickly to permit the formation of a syndicate. Lastly, there are times that the Nucleation team does not have the bandwidth to prepare the syndicate. We are working to remedy that problem by hiring a team of Venture Associates.
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 proceeds in excess of the amount invested by the LPs. This is a “success fee” paid to the deal sponsor 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?
Nucleation is broadening its syndication activity by recruiting a team of Venture Associates to help expand our access to deals and provide diligence and deal support. If successful, you can expect to see between ten and twenty syndicated deals over the coming year.
Can I participate as a foreign resident? Can I participate if I am not accredited?
Yes, for the most part, foreign investors may participate in syndicated opportunities. In rare instances, such as for Danish residents, local rules prevent them from investing in a US syndicate for a Danish venture. Foreign investors will need to be able to meet the US SEC accreditation requirements.
Why haven’t I heard of investment opportunities like this before?
Syndications have been around a long time but technology has only recently made participation possible for accredited investors. Now, nearly all accredited investors can afford to participate in a range of private equity opportunities. Nucleation Capital is leveraging state-of-the-art technology to make advanced nuclear and deep decarbonization deals both accessible and affordable to more investors so we can all invest in these critical climate solutions.
Ready to Join?
Join our syndication network to get access to exciting venture deals. There is no obligation to invest and you can leave the syndicate at any time. All you do is set up a free AngelList Ventures account, which you’ll need should you wish to invest.
