3 ms·

How is this structured and papered? Not sure your location but in the US you need to check your investors are accredited and who they are so I'm not sure how th

by neom 8y ago

How is this structured and papered? Not sure your location but in the US you need to check your investors are accredited and who they are so I'm not sure how they expect to remain anonymous? We have a very minor investment from a VC firm that is basically an angel syndicate, we don't know who the angel investors are outside of they're accredited investors and high net worth individuals doing between 1-2MM seed a year, $60k cheques, lots of startups. If things go south, they don't want us bothering them directly, and want to work through the firm that runs the syndicate, who is very well respected.

aquins 8y ago
US, yes. You mean the VC = investors, right? How do I check for accreditation? And it very much sounds like a syndicate as well. In your case, does the money flow through the VC, or comes directly from the high net worth individuals? Latter would mean I could see who transfers the money then, right?
- neom 8y ago
  "VC" = management company who bring deals to table for syndicate. They host an investor call, you pitch on the call to the investors at large, anyone interest tells the "vc", wire funds into an escrow account hosted by the "vc" (management company) and then however much is committed is how much we get, we gave a limit the syndicate could invest, and hit that limit.
  - aquins 8y ago
    Thank you very much for elaborating! I wasn't very clear on my previous comment, but I meant that one you said "check your investors are accredited", you were referring to the VC as the investor, and not the individuals investing the money, right? So how can I check if our US-based VC is accredited? Also, we also have a maximum limit, so this seems to be a very comparable set up as you had. So presumably, the VC "pre-checked" with their high net individuals if they were interested, prepared a proposal and would want to continue with the pitch if we agree. And if successful, proceed with the financing. So do I correctly understand that you also never knew who the individuals behind the VC were, as the VC represented them at all times?
    - neom 8y ago
      You ask them, although it's usually a bullet point in a mutual diligence, our lawyer has a form their lawyers sign that attests to a bunch of SEC stuff. As a side note, I've actually been told in the past by a very large VC firm it was rude to ask, I presume at a certain point it's assumed. I also don't think you would/could ask the investor if their LPs are accredited investors, I certainly have not nor have I ever heard of it, but IANAL. I can recommend my lawyer however, Adam Bier out of SF.

by neom 8y ago

aquins 8y ago

US, yes. You mean the VC = investors, right? How do I check for accreditation? And it very much sounds like a syndicate as well. In your case, does the money flow through the VC, or comes directly from the high net worth individuals? Latter would mean I could see who transfers the money then, right?

neom 8y ago
"VC" = management company who bring deals to table for syndicate. They host an investor call, you pitch on the call to the investors at large, anyone interest tells the "vc", wire funds into an escrow account hosted by the "vc" (management company) and then however much is committed is how much we get, we gave a limit the syndicate could invest, and hit that limit.
- aquins 8y ago
  Thank you very much for elaborating! I wasn't very clear on my previous comment, but I meant that one you said "check your investors are accredited", you were referring to the VC as the investor, and not the individuals investing the money, right? So how can I check if our US-based VC is accredited? Also, we also have a maximum limit, so this seems to be a very comparable set up as you had. So presumably, the VC "pre-checked" with their high net individuals if they were interested, prepared a proposal and would want to continue with the pitch if we agree. And if successful, proceed with the financing. So do I correctly understand that you also never knew who the individuals behind the VC were, as the VC represented them at all times?
  - neom 8y ago
    You ask them, although it's usually a bullet point in a mutual diligence, our lawyer has a form their lawyers sign that attests to a bunch of SEC stuff. As a side note, I've actually been told in the past by a very large VC firm it was rude to ask, I presume at a certain point it's assumed. I also don't think you would/could ask the investor if their LPs are accredited investors, I certainly have not nor have I ever heard of it, but IANAL. I can recommend my lawyer however, Adam Bier out of SF.