Frequestly Asked Questions

Find answers to many common questions you may have about how our site works.
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5 Articles For Companies

Do I have to deal with a million new investors?

No. The investors invest in a fund which then invests in the startup. Only the fund is listed on the startup’s cap table—the individual investors in the fund are not.

The fund (Delaware LLC) is advised by the marketing partner / lead who has the responsibility to sign documents and makes decisions on behalf of the LLC.

This is equivalent to adding a single large investor to the round which keeps your legal costs down and administrative time to a minimum.

Can my company be syndicated?

Your company must be a US-based corporation and have a syndicate lead that is an approved marketing partner.

Sometimes other entity types can also be syndicated. Contact to discuss any exceptions.

On what terms does the syndicate invest?

The syndicate will invest on whatever terms you negotiate with your syndicate lead. The terms will include a determined amount of equity along with annual royalty payments.

Are syndicates legal?

CannaFundr and our marketing partner / leads comply with securities regulations. There have been no-action letters filed by the SEC regarding these types of syndicates, including letters issuer to Angel List and FundersClub.

Do investors in the LLC count towards my company’s shareholder limit?

Yes. A syndicate only adds one investor to the company’s cap table (it pools investors capital into one fund), but each individual investor still counts toward the SEC 1,999 shareholder limit.