Our diligence is pretty extensive. It’s about a 60-day process. We have a dual path of both business and legal diligence.
From a business standpoint, once the internal review’s over and we made a decision to go forward, we engage an outside group of advisors. Typically, these are world-renowned global experts in their field. These are people who founded the Danforth Plant Science Center, who developed multi-billion dollar drugs, and are just at the forefront of whatever it is in their field.
We bring them all together in a panel that encompasses every area of the company, whether it be operations or finance or sales or the market or the technology. And we ask the company to present their solution to that group and have them give real feedback to the company, from a company standpoint.
This is unprecedented access to the opinions of these thought leaders, and just feedback you wouldn’t otherwise get in a very casual environment. And not only that from a company’s perspective, these are now contacts of the companies that they can leverage to the extent possible.
And again, it’s unprecedented for them to get access to companies like that. I know other VCs do bring in domain experts, but typically they’re limited by entrepreneurs and residents, or a select handful of people that they have to help vet this. We really aren’t limited by any. We are constantly bringing in new, different people who are best suited to help that individual company’s needs and provide them with the advice they need to succeed.
Assuming you make it through this rigorous but very beneficial panel, we also have an extensive legal diligence process. And the legal diligence might be a little more than what most companies would expect at this level, and that’s due to our being a FINRA-registered product and being subject to certain rules and regulations that some other VCs may not be.
But at the end of the day, it’s a very beneficial process. It means that for future investors, or even other investors in this round, you’re incredibly well-organized.
You’ve got a diligence room, you are set up to go raise your A or your B or later rounds. And it really, if you don’t do it now, you’re going to have to do it at some other point in time, so it’s one of those deals where just get it out of the way and it will save you time down the road.
When it all culminates, I’ve yet to have had a company tell me that they weren’t better for having gone through our diligence process.
