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Requirements
for Ventures
There are some
basic requirements for us to consider your company for venture capital.
If you have questions about our criteria, please do not hesitate to call
us.
If you are developing a prescription medication or a
medical device, and your intellectual property is patented or is patentable,
please disregard the criteria herein regarding business plans and operations.
Equity
-
Within a year after funding, there should be a reasonable
opportunity for the company to go public (however,
acquisition offers would also be invited).
-
Before a substantial investment is made, all core assets,
particularly patents, must be owned by, or assigned to, the
portfolio company (not the individual principals).
Sales and Marketing
-
There should be one or more formidable barriers to entry, so
that
competitors could not readily match the venture's
competitive advantages. The most common characteristic is
strong patent protection. Other examples include governmental
controls, limited real estate, and long-term customer
contracts. Simply using better business management to
compete on price, service, or quality is not sufficient.
-
Revenues are expected to be generated by at least ten
customers each month, and no single customer
is expected to generate
more than 15% of revenues. These criteria could be skipped if
you have intellectual property that is expected to be
licensed.
-
If the business is operating, no
customers have complained to management during the past
three years of being defrauded or intentionally misled, and
subsequently were refused refunds or otherwise not made
satisfied.
Liabilities, Records, and
Government
-
There
have been no penalties over $15,000 by
any tax agency during the past five years, or since inception, whichever is
most recent. (This does not
apply to unincorporated startups.)
-
There
presently are no delinquencies in the payment or
reporting of sales, income, or payroll taxes (unless
extensions have been properly arranged).
-
All
retirement
liabilities are properly funded, if applicable.
-
There
are no existing or pending
restrictions, cause-based investigations, injunctions, or condemnations by any governmental agency.
Personnel
-
There
have not been any payrolls
during the past four years
(or since inception,
whichever is most
recent) that were missed or were
delinquent by more than a
week. This does not
apply to
unincorporated
startups.
-
No
officer or board member may
have a criminal record,
and personal
backgrounds must be
respectable.
-
Once at least
partial funding has
been received, at
least two
bookkeepers (who may
be part-time or have
additional duties)
should be on-staff.
During due
diligence, we also will consider issues specific to your company. All
businesses have unpleasant realities, and we are comfortable with accepting such
realities. You will have a much greater chance of success if you are open
and frank from the beginning about the good, bad, and potentially confusing
aspects of your business than if surprises are discovered during due diligence.
If you meet all of the requirements, we want to hear
from you! Please click here for submission
information.
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