ProcessTo Start the Process, Connect with Us
First, we need to learn something about you and your business. At this stage we don’t need to see a complete business plan, but rather the sector your business occupies and information about you. We do not want or need to see proprietary information at this stage.
The best, most expeditious way to connect with us is to contact someone you know in the firm or someone in our reference circle who knows you and knows us. We are in constant contact with a network we have built over 20 years: other venture firms and angel investors, service providers in the legal and accounting community, consultants, academics and our current and past portfolio entrepreneurs. Then an initial call or email to one of the professionals in the firm will establish if your business is in a sector we know and one where we are currently investing. It will also help us evaluate which partner might best sponsor your business.
Note: Like most investment firms, we do not sign NDAs.
Align with a Partner
Potential investments are ultimately evaluated by the entire partnership before a funding decision is made. But first, the firm relies on one partner to be an advocate for your business, direct the deep due diligence required and then sell the partnership on the wisdom of investing in your business versus the many others in review. The connection between the partner and the entrepreneur is so critical that it is hard to underestimate. Your Enterprise partner should be a trusted advisor, resource and champion for your business and we have found that close working relationships between our partners and entrepreneurs are a key predictor of ultimate success.
We Analyze the Team, the Technology, and the Market Opportunity
Our work begins with an initial analysis of your business plan. We’re interested in what it says about you and your team, the company’s technology and how it is differentiated from that of your competitors, your intellectual property, the market potential you’ve identified and the competitive landscape. Note that this evaluation is done in context of the returns we need to deliver to our limited partners within a 5-7 year period. If we see a potential fit at this point we set up the first of several meetings and proceed with due diligence.
This phase of the process is mutual. It is the period when the Enterprise team works with you to delve deeply into your business model, talk to your references, customers and competitors, and investigate all dimensions of the business, financial, intellectual property and legal aspects of the company. It is also the time when you get to know other partners and members of our professional staff and determine if Enterprise is the investment partner best suited to you and your company.
The Investment Decision: A Two Meeting Process
If during the course of our due diligence, we are favorably interested in a company, we will ask the entrepreneur or management team to make a one-hour presentation to our partnership. The purpose is to introduce the opportunity to the full partnership and to permit the partnership to guide the completion of the due diligence process in response to specific concerns and requirements.
Upon satisfactory completion of due diligence the entrepreneur or management team will bring a second, more detailed, presentation to the Enterprise partnership. This meeting lasts an hour and is a highly interactive session.
Immediately following this meeting, our partners make a collective investment decision. That decision is communicated to the company on the same day.
Should Enterprise decide to invest in your company, you will receive a term sheet outlining our conditions for investment, the amount we propose to invest and the ownership position we expect. If Enterprise Partners leads an investment, we will introduce the management team to other venture capital firms that might join as co-investors. These firms carry out independent investigations and due-diligence activities. In the final stage of the funding process we work out financing terms and arrange for the drafting of legal documents.
Since most companies require multiple rounds of financing, Enterprise maintains a reserve for future financing. As additional financings are required, we guide the company’s management team through the follow-on funding process.
The timeframe from the beginning of our due diligence to our formal investment decision can range from four to twelve weeks, with eight weeks being typical. It takes another four weeks or more to close the investment.