The process by which venture capital works is pretty straightforward. Companies will submit their ideas to people like myself, those ideas will get reviewed – generally they’re presented in the form of an executive summary- and maybe one in ten of the things that we see we’ll have further discussions with and when we have a further discussion we’re going much deeper into the idea that the company wants to pursue, the market in which they’ll be operating, the amount of capital that we think they’re going to need in order to go after it and those two stages of the process may be thirty to forty-five days.
But thereafter, the venture capital firm begins to pursue due diligence.
So we’re going to dive super deeply into the market with some experts that we know. We’re going to try to assess how large this market can be and eventually we’ll have some determination about whether or not we believe it’s an investment that’s worth making. From start to finish it’s a process that can last anywhere between three and six months. We’ve had the span of time between an initial introduction and our money flowing into a company be as long as fifteen months. So, it takes time to work through that sort of process and if you’re raising money from a venture capitalist you should be aware of that lead time.
