Update August 14: Matt unashamedly plagiarized this blog for his UBJ column this month. Enjoy the longer version here.
Before joining a VentureSouth group, we invite potential members to come to a meeting or two, to see how the groups and investment process really works. Brooke, who has been helping us keep things organized, provides this guest post outlining what happens at a meeting.
A typical VentureSouth member meeting begins with mingling among peers – the other members of the group. Refreshments are served as everyone arrives, and friends catch up on business developments, vacations, and gossip.
The program begins with a welcome of new members and guests. Investing as part of a group is easier when everyone knows each others’ strengths, so these introductions give newly-added areas of expertise an opportunity to tell a little but more about themselves.
The group leader gets thing started (after a quick confidentiality notice) with the overview of the agenda for the day. We generally start with a “news & notes” (developments relating to the groups, membership, portfolio companies, recent investments, and – increasingly often – distributions from realized investments) to keep everyone informed. We then review upcoming events for members, including future meetings, socials, happy hours, and educational workshops.
The real fun starts once the pitches begin. Often over lunch or dinner (sometimes from a VentureSouth sponsor), the strongest companies that have graduated through our screening process pitch to members. The audience can range from a handful of people (in our smaller or newer groups) to 40+ people at our larger and more established groups (like UCAN and Asheville Angels). Coupled with the variety of presenting styles from entrepreneurs, this can lead to some very different pitching experiences! And members like to ask questions and share opinions, so the Q&A following pitches is a real asset of the group.
After the pitch, members continue to discuss and share thoughts on similar companies, industries, and opportunities. There is an open discussion among the members and Managing Director about the pitch and their opinions and thoughts, a lot of great open dialogue from some of the most brilliant minds in the business. There are usually two pitches per meeting. Each member then votes on the quality of the opportunity, whether (and how much) they might potentially invest, and if we should proceed with due diligence.
Next, the team reviews diligence reports and updates on companies that presented in previous months. Members from the diligence team (which consists of group staff and, more importantly, our angel investor members) discuss the attractions and concerns, address the questions raised from the pitch discussion, explain the investment structure, and outline a timetable for investment (or not). [For more information on the diligence techniques, see our earlier blog posts.]
After robust debate, members can indicate investment interest, or ignore the opportunity.
Any last questions, updates, or member input concludes the meeting, and then members are released back into the wild. Members are welcome to stick around to ask private questions, discuss the meeting, or chat amongst their peers. Then we go to work on the next round of due diligence.