Due Diligence

Investment Process: Stage 2

he BCV IV team has over 50 years of cumulative experience in evaluating and structuring venture capital investments and has made over 50 investments in the past 15 years. Our experience gives us insight in analyzing opportunities and the operating assumptions behind business plans. Our due diligence team also includes expert attorneys, tax professionals, senior advisors and accountants.

BCV's due diligence process

Throughout each step of the due diligence process, the BCV team screens and investigates all aspects of the potential portfolio company.

Business plan review: Key to evaluating business plans is the ability to assess the risks and rewards of each opportunity. BCV carefully screens business plans, placing the highest emphasis on the management, market analysis and business model sections. In initial discussions with the company, BCV looks for management's ability to answer detailed questions about their company and a strong sense of ownership in the business.

Management presentation: The next step in the process involves a presentation by management to BCV so that a comprehensive profile of the management team can be built. BCV looks for integrity, motivation, market orientation, industry experience and leadership.

Site visits: Site visits give the team the opportunity to meet employees, observe the company dynamic, and see the facilities, products and manufacturing process. Often, site visits reveal interesting aspects of the company that are not articulated in the business plan.

Management team evaluation and reference checks: BCV places extraordinary emphasis on the quality of the people who manage the portfolio companies. Market conditions are constantly changing in the technology industry. Due to shorter product cycles, new competitors emerge, services expand and products gain new capabilities. In such an environment, the management of companies must effectively manage change. BCV conducts thorough reference checks with customers, suppliers, creditors, academic institutions, consultants, investors and acquaintances to ensure that the management team is capable of executing its proposed strategy.

Market and competitive analysis: BCV develops an assessment of market size through research, industry sources and proprietary analysis. Potential portfolio companies must operate in markets that represent a significant opportunity. If markets meet this size criteria, we will examine the competitive environment to identify individual strengths and weaknesses. Potential investments must have business strategies that properly consider these forces.

Business model and financial analysis: The business model and growth plan analysis are important aspects of the due diligence process. To be considered, portfolio companies must have the potential to reach $50 million in revenue within five years. A detailed analysis of the corporate structure and growth plan allows BCV to determine the viability of the plan and anticipated cash requirements.

Corporate review: As a final step, BCV examines corporate records which reveal important information about legal matters, debt and equity, and pending litigation, if any.

Rapid decision-making: To participate in attractive investment opportunities, the team can accelerate the data gathering and decision-making process. By engaging senior advisors as needed to complement our industry and financial expertise, BCV achieves high levels of certainty without compromising the quality of information gathered.

Consensus-driven investment decisions: If potential investments pass BCV's requirements, and if there is favorable rapport with the entrepreneur or management team, the opportunity is presented to the general partners for evaluation. If there is consensus among the general partners, BCV establishes a mutually agreeable financial and operating plan with management. This plan will form the basis against which future company performance is judged.

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