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FanClub Sports Syndicates FAQ
AS A SYNDICATE LEAD, WHAT IS THE MINIMUM I HAVE TO INVEST IN EACH DEAL?
We recommend leads invest at least 20% of the allocation to demonstrate skin-in-the-game to your LPs and FanClub LPs. However, if you are bringing other LPs in your network to the syndicate this number can be much smaller.
WHAT ARE FANCLUB CLUB MEMBER LPS?
FanClub Club Member LPs are LPs that find your syndicate via FanClub, as opposed to LPs that you know or invite to your syndicate directly. LPs can find your syndicate via their syndicate browse/search feature, deals via direct deals, or Owners Box deal invites
- If your deal qualifies, we'll send out invites to Owners Box (Our Private Capital Network)
- If your deal qualifies for Owners Box, you're also enabled to send direct deal invites, if you choose
- If LPs invest in your deal after receiving an invite via Owners Box or direct deal invites, they are FanClub-sourced LPs
HOW MUCH DOES IT COST TO SET UP A DEAL?
The setup fee for most deals is $10k plus variable state regulatory fees ($1k - $4k). The setup fee covers the legal cost and our back office team, who handle all the legal aspects of your syndicate for its lifetime. Each deal you run is setup as a separate syndicate, so each deal incurs this cost
HOW DO I INVITE LPS TO MY DEAL?
To invite LPs to your deal, visit the Investors tab on the deal dashboard for the deal in question. Once there, you'll see a section near the top labeled "Invite." There, you can filter for the LPs you'd like to invite, write a note, and send
HOW CAN I BROADCAST MY DEAL TO MORE LPS?
In addition to your own capital network and FanClub’s Owners Box Club Member network, you're also eligible to post the “Invest Link” to invest in your deal on social media accounts, newsletters, and other forms of broad distribution. In this case, you must file your syneciate as a Regulation D 506(c) versus a 506(b), to make prospective LPs go through accreditation checks and enable general solicitation
ARE DEALS PRIVATE?
Each time you setup a deal, you can decide whether you'd like it to be private to your LP network. If you do, your deal will only be viewable to the LPs you directly invite or those who back your syndicate
If your deal is not private, it is eligible to be sent to Owners Box, our private community of sports investors and Club Members. Every deal is reviewed by our Investment Committee, and if it's deemed high quality enough, we will send it out to Owners Box
Invest on FanClub FAQ
WHAT IS A FANCLUB SYNDICATE?
FanClub Syndicates are special purpose vehicles (SPVs) that make an investment into a professional sports club or league. Syndicates provide a way for Syndicate Leads (Teams, Team Owners, HNWI, Family Offices & Private Equity) to efficiently allow investors into a financing round without incurring expense legal fees or making the club’s cap table more complicated.
Instead of directly investing in to the company, investors subscribe to a special purpose vehicle which will then invest into the company on the terms listed on the Syndicate investment page
HOW IS THIS DIFFERENT FROM INVESTING DIRECTLY?
Syndicates make the process of investing into sports clubs easier to manage for everyone. Instead of directly being on the company cap table, you become a limited partner of a special purpose vehicle which itself will be on the club’s cap table. This relieves you of the requirement to interface with the company’s legal team for shareholder consents, conversions, and ongoing questions. Instead you get a single dashboard on FanClub that provides the details of your investment
The syndicate also enables participation in sports investment at a much smaller economic commitment, enabling investors to experience the unique benefits of sports ownership within a portfolio, versus having to meet traditional investment minimums of millions of dollars
WHAT ARE THE REQUIREMENTS TO INVEST IN A SYNDICATE?
They are similar to the requirements to invest directly in a company. You must meet the US accreditation requirements and pass standard KYC checks. For most Syndicates, a self-attestation of accreditation status is sufficient
WHY DO SYNDICATE LEADS (SPORTS OWNERS, INVESTORS & CLUBS) USE FANCLUB SYNDICATES?
Sports owners, investors, and clubs prefer to use FanClub Syndicates to aggregate multiple checks into a single entity. Normally to close investors, companies have to incur additional costs from lawyers and cap table vendors for every additional shareholder. The Syndicate allows owners, investors, and clubs to expand access, control closing costs, and ensure that the cap table is as simple as possible
WHAT ARE THE STEPS TO CLOSE?
Once a founder sends you the link to invest in a Syndicate, you simply choose how much you would like to invest, select how you are accredited, accept the terms, and send funds (over ACH or wire)
DO I NEED TO HAVE A FANCLUB ACCOUNT OR BE PRE-APPROVED FIRST?
No. All you need is to have the invite link that the Syndicate Lead will provide
HOW WILL I GET MY TAX INFORMATION?
FanClub manages taxes for the Syndicate and distributes tax forms (K-1s) if necessary to investors through the investor dashboard and email notifications. These forms are typically available in the first quarter of the year. Most Syndicates that are making equity investments will not have many K-1s
WHAT IF I AM NOT BASED IN THE US?
You are likely still able to participate in the Syndicate, provided that you are able to meet US accreditation and KYC requirements. You will need to wire funds in US dollars to close your investment
WHAT ARE THE STEPS TO CLOSE?
Open the invite link that the club sent you, sign up or login for an account, and choose your investment amount. You can also sign up for Owners Box (the FanClub investment community), via our website at www.fanclubsports.co
WHAT HAPPENS AFTER I INVEST?
Once your invest and the Syndicate is finalized, you will have access to a dashboard to view your position and executed documents
WHAT HAPPENS IF THERE IS AN EXIT EVENT?
We will manage the distribution for the Syndicate and may disburse either cash or in-kind shares
WHAT SORT OF FINANCIAL RETURN DOES SPORTS TYPICALLY PROVIDE?
While FanClub does not guarantee any financial return associated with investment, sports returns tend to follow a consistent private equity style return of versus a venture investing return which can be much higher but also carries an implicit risk that the business does not succeed
HOW DOES FANCLUB MANAGE LIQUIDITY?
Liquidity on team shares is currently subject to traditional exit outcomes such as acquisition or public listing (IPO, SPAC, RTO, Direct Listing). FanClub is currently developing a secondary marketplace that will give Syndicate investors a chance to sell their stakes to other participants as well as a credit facility that will be used as a liquidity mechanism to offer redemptions on a fixed timeline
WHAT PERKS DO I GET WITH OWNERSHIP?
Syndicate and ownership perks are not a one size fits all approach. Syndicate Leads and clubs may have different levels of benefits depending on the situation. Typical perks include home & away tickets and box access, merchandise, access to other owners for networking purposes, and live events such as drafts and exhibition (summer league & friendlies) competition
Factors that typically influence sports returns include sport, market, geography, ticketing & live experience (stadium), commercial & sponsorship relations, broadcast contracts, technology & fan engagement, and promotion & relegation