Raising Venture Capital

What I think that it never helps contacting VCs for help if you don't know them or you don't have relationship with the board members .

they prefer to go public rather than following the route of Mergers and Acquisitions , because it is more profitable in terms of value and revenues . 

You present your plan to the venture capital partners. It was well received and they have offer you a term-sheet. You have negotiated your major deal points and are ready for the investment. Now the VC wants to commence with due diligence.

Wait a minute... what was all that presenting and talking to partners and scientific specialists? Wasn't that due diligence? Well, yes, sort of. That was due diligence to make sure that the business model and technology were worthy of investment. Now they want to make sure your company is.

They check your corporation at a detailed level to make sure that you do not have any skeletons in the corporate closet.

 The VC will usually want some form of the following information:

1)Corporate organization and history -- basically your minute book plus any partnership agreements or joint ventures.

2)Management and employee relations -- resumes of management, descriptions of key personnel, organizational charts, any changes or planned changes in management

3)Intellectual property -- lists of any patents, pending patents, trademarks, copyrights, etc. as well as all claims and litigation by or against the Company regarding patents and patent infringement.

4)Financial and accounting matters -- Financial statements, preferably audited, over the past three to five years, and copies of all documents from previous financings, stock purchase agreements, shareholders agreements, etc.

5)Legal and tax matters - all claims and litigation by or against the Company including any issues with income or employment taxes.

6)Acquisition, divestiture, or reorganization - any documentation surrounding any acquisition, divestiture, or reorganization in recent years.

Every VC firm has its own list . Often the list will include additional sections on product and sales plans, competitions, public relations, and R&D.