Running a Club

Learn best practices for running your investment club.
There is no single way to run an investment club. Syndicate provides flexible Web3 infrastructure and tools for investment clubs to make on- and off-chain investments—Syndicate is also composable with other Web3 governance and DAO tools. That said, there are some core best practices to keep in mind when running your club.

Quick Overview

This page provides information on the following common areas for running an investment club:
  1. 1.
    How to make investments from your club (jump to section)
  2. 2.
    How to manage your club (jump to section)
  3. 3.
    How to make investment decisions (jump to section)
  4. 4.
    How to manage portfolio and updates (jump to section)
  5. 5.
    How to manage club members (jump to section)
  6. 6.
    How to manage your cap table (jump to section)

1/ Making Investments

The Web3 wallet (e.g., MetaMask, Gnosis multi-sig) the admin used to create the investment club on Syndicate is the club's wallet. So, you will use the investment club's wallet directly to make investments into tokens, NFTs, and startups. Investments made by the club's wallet will show up in the investment club's dashboard on Syndicate.

Investing in tokens (ERC20s)

Any Investment Club can purchase tokens on any DEX that supports Wallet Connect. Simply connect your wallet or multi-sig using Wallet Connect to your DEX of choice and make the trade how you traditionally would.
Once purchased, the assets will be displayed on the Syndicate dashboard for all of your members.

Investing in NFTs

Any Investment Club can purchase tokens on any NFT exchange that supports Wallet Connect, including OpenSea, Zora, and others. Simply connect your wallet or multi-sig using Wallet Connect to your exchange of choice and make the trade how you traditionally would.
Once purchased, the assets will be displayed on the Syndicate dashboard for all of your members.
Gnosis multi-sig wallets cannot sign traditional transaction messages. While Gnosis recently added a new signing standard, NFT marketplaces like OpenSea have not yet implemented this standard. Thus, it's difficult to purchase NFTs directly on OpenSea using Gnosis.
However, NFT Aggregator Gem does support Gnosis Safe via Wallet Connect! We recommend Gem for NFT purchases when using Gnosis Safe.

Investing in Startup Equity

You can invest in startup equity off-chain if your investment club has a legal entity. If you want to create a legal entity, you can find more information here. Syndicate is able to help with this.
Since startup equity is off-chain, these investments will need to be manually recorded. You can manually annotate off-chain investments on your dashboard. For more information, check out our guide here.

2/ Managing Your Club

Investment Clubs are inherently social. Members of your club will most likely be discussing various investment opportunities, portfolio updates, sales decisions, due diligence, and much more on a regular basis. While you can consider Syndicate to be your "investment home," your club will also need a "social home." Here are some options:
  1. 1.
    Create a Telegram group. Many web3 communities today begin with a Telegram group (or a group chat on a similar app). This is simply a way to centralize conversations for the community, but it also enables simple voting, event management, etc.
  2. 2.
    Create a Discord server. At a certain scale, simple group chats can become unwieldy. Discord servers have become the go-to way for web3 communities to talk, work, and build. Many investment clubs use Discord as their home base.
  3. 3.
    Create a Discourse. Sometimes synchronous conversation doesn't fit the needs of an investment club. Discourse, or other forum software, allows for more long-form, persistent conversations within a community and can either be used in conjunction with a group chat or completely independently.
Regardless of your choice, having a way for investment club members to communicate is absolutely critical.

3/ Making Investment Decisions

Investment clubs legally require that all members participate in all investment decisions (read more on investment clubs here). While everyone does not need to be involved in founder calls or due diligence, everyone must vote on all important decisions, including the investment and sale of every asset. There are a few ways to do this:
  • A Telegram poll. If you're using Telegram, a simple poll might be enough for smaller groups.
  • A Discord emoji vote. If you're using Discord, emoji voting might allow for more granularity in voting decisions. You can also use various Discord bots for polls.
  • Token-based Snapshot voting. Every Syndicate Investment Club comes with built-in ERC-20 support. As such, given that all of your members will receive club tokens proportionate to their share of the club treasury, a token-based Snapshot vote is also a possibility for governance.
...and any other web3-based governance tool.
The idea is that, in order for investment clubs to be legally compliant, every member must be involved in the decision-making process. What that process looks like is totally up to you!

Guilds and Working Groups

Depending on the size and goals of your club, you might want to divide work to ensure that the responsibilities of an investment club do not become burdensome for any person or group. One way to do this is through Working Groups (aka "guilds").
These working groups can each be in charge of specific missions within your community: deal sourcing, due diligence, portfolio support, etc. By creating these working groups, you'll be able to organize your community more thoughtfully and potentially allocate extra shares to groups to reward them for their work.

4/ Managing the Portfolio & Providing Updates

Syndicates have used Telegram, Discord, Notion, or other tools to update their members on investment decisions and updates.
Again, Syndicate is governance-agnostic, only requiring that you have some level of participation from every member on every investment for legal purposes.
Some best practices for portfolio updates and management include:
  • Adding members of portfolio companies to your Discord, Telegram, etc. in a private channel, so that your investment club can be in consistent contact and provide help where needed.
  • Creating a "portfolio management" working group comprised of members of your club focused on portfolio services and support.
  • A portfolio-updates channel or newsletter that is managed by a subset of the investment club, to provide updates to the larger group about portfolio performance and news.

5/ Managing Membership

At a high level, it is good practice for your investment club to develop standards for membership. While participation in voting is a necessary one, others might include:
  • Being an accredited investor (e.g. if your club is investing in startups)
  • Minimum deposits
  • Participation in a working group
Again, governance and membership standards for your investment club are entirely up to you so long as you are following regulatory guidelines around accredited investors rules and member participation.

6/ Managing your cap table

These tools are intended to help investment clubs manage their membership, help maintain compliance, and account for uncommon situations. Uses of these tools for other intended purposes should be consulted with their legal and tax advisors.
Please make your club is open to deposits before minting and/or burning tokens. If your club is closed to deposits, you can reopen using the directions here.
You can adjust your cap table by minting/burning club tokens and transferring/removing those tokens to/from a member's address.

Adding members

For adding new members to your club, click on the "Members" tab of the dashboard.
If you don't yet have any members in your club, you can use "Add member manually" option as seen below.
If you already have members in your club, you can use "Add member" option as seen below.
Either way, once in the modal, enter the recipient address and the number of tokens you would like to mint to them.
After entering the information, verify and complete the mint process. Once the mint is complete, the address will then be added to the cap table which can be viewed in the "Members" tab of the dashboard along with the number of tokens and ownership percentage information. Note that the deposit amount shows as < 0.01 USDC or ETH, this is because the mint was not tied to any fund deposit actions.
Member's view when newly minted club tokens are added to the cap table

Modifying club token allocation

For modifying club token allocation, click on the "Members" tab of the dashboard and hover over a member row. You'll then see the "Modify club token allocation" option as seen below.
Selecting this will open the club token allocation modal. You can mint/burn member tokens by increasing/decreasing the amount that's pre-populated inside the Club token allocation field.