Submitted Business Plans go through the following investment process:
Screening
After Delaware Crossing receives an Executive Summary that satisfies the
guidelines (see Submit Business Plan), a representative
of Delaware Crossing will review the materials and present it to one or
more members.
If the Executive Summary is endorsed by a member, then a brief meeting will be arranged between the company and the Screening Committee. Based on that presentation and any follow-up due diligence, the company may be invited to present at one of the membership meetings. Presenters will be asked to agree to Delaware Crossing’s general conditions for presentations, which includes such items as agreeing not to directly contact or solicit our Members, respect for the privacy and confidentiality of our Members, the payment of a fee out of proceeds which are raised (see “Fees” below), and the like.
Presentation to Members
Membership meetings are held periodically, such as once every four to
six weeks. At each membership meeting, one to three companies are invited
to make a thirty to sixty minute presentation.
For example, each company is given approximately fifteen minutes to cover the following topics: management introductions, investment terms and exit strategy, company overview, product/service, industry overview, competitor analysis, marketing plan, historical performance, financial projections and requested capital and expected usage. The company’s presentation is followed by a lively Q&A dialogue.
At the conclusion of the presentation, the company is excused and the members privately discuss the proposal.
Deal Manager
At the conclusion of the membership meeting, the membership decides whether
the prospect is worth further attention and designates a member as the
deal manager. Together with Delaware Crossing Investor Group, the deal
manager performs due diligence, assigns a valuation, solicits interest
from other members, negotiates a transaction and serves as a member of
the board of directors or an advisory committee.
Investment
Members who wish to participate in an offering create a new limited liability
company for purposes of that investment. From the perspective of the portfolio
company, Delaware Crossing Investor Group is one shareholder. Investments
are typically in Series A preferred stock, although convertible debt structures
are also considered. Occasionally Delaware Crossing Investor Group will
consider other investment formats, such as loan guarantees. Delaware Crossing
Investor Group may assist its portfolio companies in securing next stage
financing from a venture capital firm, but Delaware Crossing Investor
Group generally does not participate in follow-on rounds.
Fees
Delaware Crossing Investor Group does not charge prospective portfolio
companies any fees to submit a business plan or to present to the
members. Delaware Crossing Investor Group does charge portfolio
companies a due diligence fee up to 2% of the amount invested based on
the amount and costs of due diligence performed.
Follow-Up
Following the offering, the portfolio company must report on substantial
changes to business or business status, positive or negative, on a quarterly
basis (within 30 days of close of calendar quarter). The portfolio company
must provide D&O insurance or full indemnification of directors in
cases where a member is serving on the board.
Please read Delaware Crossing’s Submit Business Plan.