Syndication Question

[Bruce Lee]

This is going to sound really stupid but, is raising capital and syndication the same thing?

[J Scott]

Syndication is a subset of raising capital. Syndication is typically finding more than one (often many more) passive investors who pool money into an investment managed by someone else (though the someone else may be an investor as well).

Syndications are typically used for larger deals where it's difficult to find one investor who will/can cover the entire cost of the project. Also, by virtue of the pooling of funds from passive investors, syndications are typically governed by SEC regulation, both federal and state level.

Syndications are typically equity deals, though they could pure debt or a combination.

For smaller projects, it's more typical to just have one (debt) lender per project. That is NOT a syndication as it's a single investor.