Regulatory Around the Fund Manager
There are regulations around the fund manager. A fund manager is considered an investment advisor, which is defined as anyone who provides advice to others regarding securities in exchange for compensation. VC fund managers must register with the SEC unless they qualify as an exempt reporting advisor. They are not...
Regulatory Around the Fundraising Process
There are regulations around startup funding. These regulations provide an exemption from the securities laws. Here’s a list of key regulatory terms to know: Rule 506b Founders or issuers of a stock can raise an unlimited amount of capital. They can raise from an unlimited number of accredited investors. They...
Regulatory for Private Funds
Regulatory for private funds includes venture capital funds. VC funds can find an exemption from regulatory requirements by one of the following: Having fewer than 100 owners in the fund. This excludes entities created for the purpose of investing in the fund, such as SPVs or Special Purpose Vehicles. This...
Automating Your Dealflow Process
Startup investors see a tremendous amount of deal flow. Finding quality deals is the challenge. Here are some key steps to automate the dealflow process: Set up tools to search for founders with a specific background. For example, one can set a search to find founders from Y Combinator or...
Key Criteria for Venture Capital Investment
Venture capital requires a specific type of startup to meet its investment objectives. Here’s a list of key criteria VCs look for: Large market size. The market is large and growing fast. This provides the startup numerous opportunities to find a position in the market. Large market population. The market...
How To Perform Due Diligence on an Investor
In raising funding, the founder should be doing as much diligence on the investor as the investor is doing on the startup. Here are some key steps to perform due diligence on an investor: What type of investor are they? Angel, venture capitalist, family office, other? What is their track...
The Basic Due Diligence Process
Investors funding a startup must first complete the due diligence process. The objective is to understand all the particulars about the company and the team. Here is the list of the basic due diligence process: The investment. This includes the term sheet, other investors in the round, and dilution impact....
The Importance of Vesting Shares
Vesting shares means taking shares granted to an employee and having them earned over time. A typical vesting schedule is four years with a one-year cliff. This means the employee granted shares will not have ownership of the shares for the first year. At the end of the first year,...
What Is Reverse Due Diligence
Due diligence is the process of reviewing the condition of a company to be acquired. The purpose is to understand the company’s current status, including risks, assets, liabilities, and potential opportunities. Reverse due diligence is when the company being acquired reviews the condition of the acquirer. Here are several reasons...
