The Nucleation Syndicate

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About the Nucleation Syndication

Accredited investors interested in learning about investment opportunities in the advanced nuclear sector are invited to join the Nucleation Syndicate hosted at AngelList. From time to time, as we invest on behalf of our venture fund, we are able to obtain additional allocations of equity that we can offer to our network of pronuclear investors. These allocations are offered to our existing subscribers first, then to those in our syndicate. We fill these allocations on a first-come, first-served basis at the same valuation that we invest in with our fund. This enables existing subscribers to increase their participation in select deals and it also enable investors who are not subscribers in the fund to participate in some of our deals. For those not familiar with how syndicates work, we provide the following Q&A.

Syndicate Q&A

What is a syndicate?

An investment syndicate is a group of accredited angel investors who come together to invest in a particular venture opportunity that is made available by a lead investor with access to particular deal flow, in this case Nucleation Capital. In this way, a syndicate pools the capital provided by a group of accredited investors with interest in particular types of opportunities but who wish to invest in smaller amounts, into a single investing entity, which simplies things for the ventures that are raising capital.

How does syndication work?

Nucleation Capital will select opportunities, write up a deal memo summarizing information about the venture and create a special purpose vehicle (an SPV). We will offer those who join our network the opportunity to read our deal memo and decide if you’d like to participate. There is never an obligation to invest. The minimum to participate in a syndicated deal is only $1,000 and is a one-time event. This makes access to select Nucleation deals very 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. If you do choose to invest in a syndication, you will share a percentage of the future return paid out on that investment, called “carried interest” or just “carry.” You get 80% of the profits and Nucleation gets 20% carry. Nucleation does not charge a management fee on syndicated deals, however, there is a one-time fee that covers the costs of setting up the SPV charged by AngelList. This fee is deducted from the total principal pro-rata across all investors. Some states are now taxing SPVs. If there is a tax, this will also be split on a pro-rata basis among the investors. Nucleation Capital fund subscribers qualify for a reduced rate on the carried interest paid to Nucleation. (Note: we do not act as brokers or finders and are never paid by founders.)

What’s difference between investing in Nucleation’s rolling fund versus the Nucleation syndicate?

Rolling fund subscribers have automatic participation in every deal the fund invests in. Not all of the deals are syndicated, however, so those participating just in the syndicate may not have the ability to invest in certain deals. Fund subscribers fund each quarter at a set level of capital for a pre-set term, typically four or eight quarters. Nucleation makes the investment decisions and the investor need not review deal information. Syndicate investors do not commit capital in advance but are given the opportunity to review select deals and decide if they wish to participate, on a deal by deal basis.

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 can afford. We only syndicate those deals which have additional allocations of equity that remain available. Nucleation’s syndication offers go to existing fund subscribers on a priority basis, then to members of the Nucleation syndicate, if sufficient allocation is available.

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 “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.

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, complete accreditation and wire your payment. Your account at AngelList will track your investments, funding, management reports, K-1s  and investment performance for the duration of these investments.