Upon receiving your business plan, we will determine if the investment opportunity potentially meets our investment criteria. If we like your proposal, we will arrange to meet with the management team and listen to your presentation. If we decide to proceed further, we will commence initial due diligence. This process may take anything from 4 to 8 weeks depending on how quickly we get the information we require or need to get comfortable. During this period, we spend time understanding the business and also getting to know management. Equally as important, it is also an opportunity for management to get know us.
If our due diligence is positive and we decide to proceed, we will give you a Term Sheet setting out the terms of our investment. Once you have accepted this, we will commence with detailed due diligence which will normally include a financial, legal and sometimes a technology audit. Simultaneously, we will commence with the preparation of legal documentation. This process will take about 4 to 5 weeks at the end of which, if the results of our due diligence are satisfactory, we will complete our investment.
A typical venture capital investment process will take about 3 –4 months, possibly longer but unlikely to be shorter. It therefore involves a lot of time, effort and expense from all parties and at any stage, for a variety of reasons, the venture capital firm may decide not proceed further. We therefore spend time early in the process making sure you clearly understand our process, role and expectations as an investor and potential ‘deal breakers’.