how we work
It is a closed community of investors interested in the venture capital market and investing in the best technological projects.
The Garage Syndicate organizers and managers: Igor Shoifot, Sergey Mosunov, Vladimir Gidirim (General Partners) have invested in hundreds of startups, achieved dozens of profitable exits, have 35 years of combined experience in venture capital investments and have the complementary competencies required for a successful syndicate.
GPs have access to the best deals through a network of business contacts built over many years in the venture capital and startup industry in Silicon Valley, New York, Boston, the Middle East, Europe and Asia. The goal of the Syndicate is to pool capital from a group of investors and participate in these deals.
Each month, 1-3 deals are offered to investors for co-investment.
The Garage Syndicate organizers and managers: Igor Shoifot, Sergey Mosunov, Vladimir Gidirim (General Partners) have invested in hundreds of startups, achieved dozens of profitable exits, have 35 years of combined experience in venture capital investments and have the complementary competencies required for a successful syndicate.
GPs have access to the best deals through a network of business contacts built over many years in the venture capital and startup industry in Silicon Valley, New York, Boston, the Middle East, Europe and Asia. The goal of the Syndicate is to pool capital from a group of investors and participate in these deals.
Each month, 1-3 deals are offered to investors for co-investment.
The Garage Syndicate invests in early and late stages as well as pre-IPOs. These companies are:
Syndicate invests only in companies, the founders of which the GPs personally know well, or that have been recommended by GP acquaintances from venture capital funds, angel investors or other successful funders. Although the Syndicate does not lead investment rounds, but rather gets an allocation to co-invest in it, access to communication with funders and due diligence materials are a prerequisite for participating in the deal.
GPs always co-invest in all syndicate deals.
- Fast-growing, with numbers-driven deals in large potential markets with high probability of exit/multiples;
- Unique, with clear competitive advantages, not just in technology, but mostly in business;
- And reasonably priced deals with high potential for rapid positive revaluation.
Syndicate invests only in companies, the founders of which the GPs personally know well, or that have been recommended by GP acquaintances from venture capital funds, angel investors or other successful funders. Although the Syndicate does not lead investment rounds, but rather gets an allocation to co-invest in it, access to communication with funders and due diligence materials are a prerequisite for participating in the deal.
GPs always co-invest in all syndicate deals.
The Garage Syndicate consists of the Garage Syndicate Master LLC, which is an umbrella fund that arranges SPVs to participate in transactions under U.S. law. The operations of the Syndicate are handled by the Garage Syndicate Management LLC, which bears all legal and accounting responsibilities, as well as the tax and commercial expenses of the transactions, and ultimately distributes profits between the investors and receives a carry (success fee). The Syndicate is registered in Delaware, USA.
SPV (special purpose vehicle) is a type of special purpose company created for a specific project, in our case for a specific transaction. All investors' checks are accumulated in the SPV, which, in turn, goes to the object of investment by a single check and is indicated in its captable. Each investor becomes the owner of a share in the SPV according to the size of his check.
1. The Syndicate informs investors about the new deal in Telegram feeds and email newsletters.
2. Investors make commits to participate and undergo KYC identity verification (if it is not passed beforehand when entering the Syndicate).
3. After a sufficient number of commits have been collected, the Syndicate initiates the creation of the SPV.
4. Once the SPV is ready, investors receive an invitation to invest, with a link to a platform with special software (the Syndicate uses the Allocations platform).
5. During registration on the platform, investors fill out the W8 form - which confirms the status of the investor as qualified - these are the only ones allowed for transactions in the U.S. financial market.
6. After filling in all the data the platform generates a package of documents (Subscription Agreement) and details for the transfer of investment (wire instructions).
7. The investor goes to his bank and makes the payment attaching the documents. In case of investing from a legal entity, the bank will request additional documents, which the Syndicate provides upon request. Each transaction of the Syndicate is supervised by a deal manager, available in the individual support chat, who can be contacted for assistance with all questions.
8. The payment is credited to the SPV account within a few days.
9. Within 2-3 weeks after the deal closure the investor receives a capital account statement of the made investment.
2. Investors make commits to participate and undergo KYC identity verification (if it is not passed beforehand when entering the Syndicate).
3. After a sufficient number of commits have been collected, the Syndicate initiates the creation of the SPV.
4. Once the SPV is ready, investors receive an invitation to invest, with a link to a platform with special software (the Syndicate uses the Allocations platform).
5. During registration on the platform, investors fill out the W8 form - which confirms the status of the investor as qualified - these are the only ones allowed for transactions in the U.S. financial market.
6. After filling in all the data the platform generates a package of documents (Subscription Agreement) and details for the transfer of investment (wire instructions).
7. The investor goes to his bank and makes the payment attaching the documents. In case of investing from a legal entity, the bank will request additional documents, which the Syndicate provides upon request. Each transaction of the Syndicate is supervised by a deal manager, available in the individual support chat, who can be contacted for assistance with all questions.
8. The payment is credited to the SPV account within a few days.
9. Within 2-3 weeks after the deal closure the investor receives a capital account statement of the made investment.
Under U.S. law, investors who meet the following criteria are considered to be qualified investors by default:
- Your personal/cumulative capital exceeds $1 million
- You have had income of more than $200,000 in the past two years
- You have had cumulative income over $300,000 in the past two years
- Your professional activities qualify you as an accredited investor
- You are an employee of a fund management company
Yes, starting in 2022, we accept investments both in U.S. dollars and USDC.
Commit - commitment - is a commitment to participate in the deal. This means that the investor is interested in the company and has decided to participate in the deal. We do not use the preliminary commit stage (soft) in our deals and only accept hard commits from investors.
Investor’s commit means that the investor mandatory signs an Investment Agreement (Subscription Agreement), and that he already has the funds ready to make the money transfer. Signing the documents means that the investment will be made within the timeframe specified in the Memorandum of Understanding, and no cancellation of the investment will be allowed.
Investor’s commit means that the investor mandatory signs an Investment Agreement (Subscription Agreement), and that he already has the funds ready to make the money transfer. Signing the documents means that the investment will be made within the timeframe specified in the Memorandum of Understanding, and no cancellation of the investment will be allowed.
The minimum check may vary from transaction to transaction.
Usually it starts at $10K or 10K USDC.
Usually it starts at $10K or 10K USDC.
There is no membership fee in the Garage Syndicate, we do not seek to make money on anything other than net profit.
The Syndicate retains its carry (10% to 20% of investor's income depending on his check) only if the investor's return on the equities exceeds the minimum allowable rate of return (hurdle rate) equal to 10%. The exit rate of return is calculated as [S/B*100% - 100%], where S is the sale price of the asset, B is the purchase price of the asset (without the setup fee).
Also the Syndicate charges a commission (setup fee) of 2% to 7%, depending on the check, to cover all expenses (legal, accounting, tax, commercial, etc.), it is not the Syndicate's earnings. These costs are shared proportionally among the participants, there are no management or other additional fees.
This ensures full transparency and 100% coincidence of investors' interests.
The Syndicate retains its carry (10% to 20% of investor's income depending on his check) only if the investor's return on the equities exceeds the minimum allowable rate of return (hurdle rate) equal to 10%. The exit rate of return is calculated as [S/B*100% - 100%], where S is the sale price of the asset, B is the purchase price of the asset (without the setup fee).
Also the Syndicate charges a commission (setup fee) of 2% to 7%, depending on the check, to cover all expenses (legal, accounting, tax, commercial, etc.), it is not the Syndicate's earnings. These costs are shared proportionally among the participants, there are no management or other additional fees.
This ensures full transparency and 100% coincidence of investors' interests.
Capital Account Statement is a document confirming the ownership of the share in the SPV. The document is available in the investor's personal account on the platform during 2 weeks after the transaction closure. Subscription Agreement is a document regulating the rights and obligations of transaction participants.
The documents are available in the investor's personal account on the platform for 2 weeks after the transaction closure.
The documents are available in the investor's personal account on the platform for 2 weeks after the transaction closure.
Summing up of the deals takes place after the exit of the SPV from the object of investment (company). This occurs in one of the following scenarios:
- A sale via a merger, or an acquisition, or the company's IPO. This is the most obvious way to complete the investment, but it is tied to the strategy of the company as a whole. An individual investor has very little ability to influence the events.
- The sale of shares (shares) in the secondary market, usually to a larger investor. This strategy is a priority for us, since the demand for shares of late-stage companies by large private equity funds is very high.
The exit period of an SPV from the object of investment depends on the type of deal. In the deal’s early stage the exit period can be as long as 4-6 years, in the late stage the maximum exit period is 3 years. In pre-IPO deals, it is equal to the lockup period, which is usually 6-12 months.
Return on investment and distribution of profits takes place after the SPV withdrawal from the object of investment. The investor receives the return of his investment check (minus the setup fee). Then the net profit is distributed in accordance with the shares of investors in the SPV. The Syndicate keeps the carry - a share of the investor's profits (success fee). Depending on the check it can be from 10% to 20% and it is specified in the documents when making the investment.
The Syndicate keeps its carry only if the investor's return from the exit exceeds the minimum allowable rate of return (hurdle rate) equal to 10%. Exit yield is calculated as [S/B*100% - 100%], where S is the sale price of the asset, B is the purchase price of the asset (excluding the setup fee).
The Syndicate keeps its carry only if the investor's return from the exit exceeds the minimum allowable rate of return (hurdle rate) equal to 10%. Exit yield is calculated as [S/B*100% - 100%], where S is the sale price of the asset, B is the purchase price of the asset (excluding the setup fee).
In this case, the payments are refunded in full.
There are always risks that something will not go according to plan. This is exactly why - to reduce the risks as much as possible - GPs select for investment only those companies in which they know the founders personally, or those recommended by GP acquaintances from venture funds, angel investors, or other successful funders.
Nevertheless, venture investing is one of the riskiest, and it is recommended to use it as a 10 percent part of your investment portfolio.
Nevertheless, venture investing is one of the riskiest, and it is recommended to use it as a 10 percent part of your investment portfolio.
An investor CAN withdraw from an SPV before the end of the investment cycle only by selling his share in the SPV to another member of the Syndicate. The Syndicate itself does not buy out investors' shares, but may consider such a possibility.
The Syndicate has no rights or ability to take over the payment of taxes for investors, but the Syndicate provides all the documents that are necessary for this process. The investor's income must be self-declared by him with the tax authority he is registered with. Personal income tax for Russian citizens is 13%. Legal entities pay taxes in respective jurisdictions according to their chosen taxation system.