Keiretsu Forum reserves the right to terminate DD efforts conducted against our values. People should not participate in DD for the sole purpose of marketing their services to the entrepreneur.
1. Open Process
The DD process should be conducted in an open, democratic, and professional manner. Access to management, documents and information obtained as part of due diligence should be shared openly, subject to requests of confidentiality.
2. Due Care with Public Forum
Discussions in an open forum, whether online, in conference calls, or in meetings, should take into consideration that careless remarks, may affect other people’s investment interest. Stated opinions, must be fact-based, impressions honestly derived from the process, expertise developed elsewhere (or from experts consulted)
3. Healthy, Respectful Assessment
Angel investing by definition is high risk. Expect all companies to show potential challenges and please consider that they may be mitigated. The diligence process will identify potential challenges, assess their likelihood, weigh the impact, and understand the mitigations in place. The discussion must take place in a constructive manner, avoiding personal charges, pessimistic views, and over-reaction. When expressing a factually objective negative view, allow the company a chance to respond in writing, and discuss among the due diligence group (not the entire Interest List) about the views you intend to include in the report. When arbitration is required, involve the DD Team Leader, or even Keiretsu Team members (the Due Diligence Director is the appropriate person).
4. Full Disclosure of Relationships
Investors on the diligence team who have previously engaged with the company or individuals on the management team, in ways that may create bias when writing a diligence report, must fully disclose their relationship within the report. These engagements may include prior investments with the company, services performed or under discussion with the company, involvement of any kind with a competitor, or
past relationships with any members of the management team.
5. Contributing Members of the Team
Active participants in DD will have authentic interest to invest, or possess domain expertise that may be valuable to those considering an investment. DD leaders or members may invite experts to participate in DD as appropriate.
6. Opportunities for Review
The DD team will share findings, draft reports, points of view, and final documents with the management team in advance of sharing with the rest of the potential investors. This will provide the management team an opportunity to correct errors, point out tone issues, and prepare a response if necessary. We believe that there should be no surprises for anyone involved in the process.
7. Respect for Entrepreneur’s Time and Money
Keiretsu Forum understands the challenges of launching a business, and that raising angel funding can be a challenging activity for the entrepreneur and management team. Additionally, we are aware of the expenses involved in courting investors. We endeavor to scale the due diligence and fundraising activities to yield a good return on the entrepreneur’s investment.
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