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DEAL LEAD PROCESS AND GUIDELINES

Deal Lead Responsibilities

 

  1. LIASON with the entrepreneur following pitch night through deal conclusion

  2. LIASON with interested HBSAANY members and HBSAANY deal committee

  3. SET UP and host due diligence meetings

  4. ASSESS member interest periodically throughout the process and make go/no go decision based on interest

  5. ENSURE the entrepreneur has a positive HBSAANY experience regardless of outcome

  6. MOVE THE DEAL ALONG – attempt to complete diligence within 30 days

 

KEY TOOLS

Doodle: www.doodle.com

Gust: www.Gust.com 

 

See more re: Using Gust, at end of discussion

 

Deal Lead “Playbook”:

  • Pitch Night: Deal Leads identified/assigned and their status on Gust is updated as such

    • Screening and Deal Chairs target two Deal Leads for any deal. If only one Deal Lead surfaces, deal may still proceed.

    • Program Manager (Nina Wanerman) emails a Pitch Night Recap newsletter.  New deals and Deal Leads announced via email to HBSAANY members and members are asked to use Gust to indicate their interest in these companies.

  • Program Manager emails the entrepreneur within 24 hours of Pitch Night to let them know of HBSAANY’s interest and introduce Deal Leads.

  • Deal Leads schedule Discovery meeting

    • Contact entrepreneur and get several times during which the company is available for a 90 minute due diligence call

    • Create Doodle poll with these times to determine the best time for the group Discovery Meeting. Distribute this link to members who have indicated interest in observing the deal by posting this within a Deal Discussion on Gust.  This will send an email notification to everyone.

 

KEY RESOURCE:

  • Determine date based on responses – MAKE SURE TO CHOOSE THAT WHICH IS BEST FOR DEAL LEADS – deal leads are critical to the process.  While it is IDEAL to include as many who are interested as possible, SCHEDULE A MEETING EVEN IF NO DATE EMERGES AS MOST FAVORED.  We commit to doing at least one due diligence session.

  • Communicate date/time to Program Manager, who will create all necessary events to be displayed on the Company’s Deal Page on Gust.

Discovery Meeting PREP

  • TIP: Due Diligence Checklist of questions found in the “Membership” Wiki section of this website can help with Q&A framework.

  • Develop question list based on company’s business plan – how does it generate revenue, profit – how does it use proceeds – what is the context for this company’s development (e.g. unmet need, new way of doing something), what is competitive landscape/moat, product differentiation. 

  • Send list to entrepreneur two days prior to call

  • URGE ENTREPRENEUR MAKE SURE COMPANY GUST ENTRY IS UP TO DATE so that members can view current information

Discovery Meeting AGENDA 

 

Deal Lead chairs meeting - request Co Lead or another participant to be take notes that can be posted on Gust after meeting

First 90 minutes:

  1. At the beginning of the session, take attendance and begin recording (program manager will assist)

  2. Brief introduction of company, entrepreneur(s), and the objective of the session

  3. Keep focused: Deal Lead should keep conversation relevant to question asked and make sure it is answered before moving on to the next question.

  4. Once 90 minutes have transpired, thank the entrepreneur for their time and ask them to leave the call/meeting

 

Last 30 Minutes:

  1. Get member feedback and determine who is still interested in moving into due diligence.

  2. If there is sufficient interest to move forward, determine critical issues to be explored/answered – send entrepreneur a “thanks and we will follow up” note.

  3. If there is NOT sufficient interest, promptly notify the entrepreneur, thank them for their time, and update the Deal Chair(s). A quick “no” is always appreciated by the entrepreneur and helps maintain our reputation.

 

Further Due Diligence:  Deal Lead/co-lead coordinate Due Diligence. Relevant materials are uploaded to Gust by the entrepreneur and the deal team.  

 

The purpose of these meetings is to, among other things:

 

  1. Review, delve more deeply into information from Pitch Night and Discovery sessions, obtain additional data/information

  2. Vet expert opinions on the business (potential customers, product end-users, IP attorneys, HBSAANY experts/members).

  3. Review the financials

 

  • Use Gust to notify observing and interested HBSAANY members of future meetings

  • Have the Program Manager schedule/record via Zoom AND post meeting notes on Gust

 

Ask members for any issues they would like addressed in these meetings.  

 

  1. During the course of these meetings, the Deal Lead should monitor group interest. If it becomes clear that the group is no longer interested, notify the entrepreneur and Deal Chair(s) and conclude diligence.

 

AFTER ONE MONTH: Indication of Interest Call

Deal Lead should schedule a call to review what has been learned, assess member interest and remaining issues and questions to be addressed before making investment decisions .A good target for this is 30 days after pitch night, but some deals may need to move more quickly if the round is filling up, and some deals may have sufficient open info that more time is required.  30 Days is a good checkpoint for each interested investor to provide an or investment amount on Gust.

 

DEAL CONCLUSION

IF THERE IS A DECISION TO INVEST:  Deal Lead should communicate to the entrepreneur/company contact the total investment amount and number of investors.  In most cases, the deal lead sends a list of committed investors with contact information and individual amounts that each has committed.  In some instances, the deal lead will further negotiate deal terms but more often, this is not the case.

 

Once the company has the investor information, the company contact will reach out to individual Angels to send closing and funding documents, and investors will transmit funds directly to the company.

 

  1. Deal Lead should remind members to update status on Gust to “Invested” and include the investment amount (some may opt to remain “private” re: amount).

  2. Deal Lead should inform the Deal Chair(s) that the deal is concluded.

 

IF THERE IS A DECISION TO DECLINE:  Deal Lead communicates this to the entrepreneur, with any constructive feedback.  Deal lead should inform Deal Chair(s) that the deal is concluded.

 

​IMPORTANCE OF USING GUST

 

  1. Gust is the web-based tool HBSAANY uses for a variety of purposes including: (1) Processing company applications, (2) securely distributing deal information to members, (3) posting HBSAANY-related events and recording RSVPs and (4) communication between members.

  2. While it takes some members time to get used to the interface, using Gust for the above purposes is important as it allows HBSAANY to keep all information in one, secure location. Unlike email chains, communications sent through Gust allow members to catch up on what has been discussed so far regarding a particular deal without any additional steps. Please use and encourage all members to use Gust exclusively when discussing matters related to a deal at hand.

Deal leads should familiarize themselves with the following communications on Gust:

 

  1. Company Discussions: These are located on each company’s Deal Page. These messages go out to all members who have the “Subscribe to Deal” toggle activated. This should be the most-used method of communication for Deal Leads.

  2. Company Status Updates: These are located on each applicant company’s Deal Page.  The Deal Lead should use the “Update Status” button on Gust to indicate current diligence status. Please update after each milestone of the deal process. Example: “Discovery meeting occurred on June 10, 2023. We are now looking to identify possible customers of the Company, so please post a Discussion on Gust if you have any ideas.”

  3. Private Message: User-to-user messages. To compose, navigate to the Members page and search for the person you would like to message using the Search feature, then click the envelope icon next to their name.

DISCLAIMER:  Please include the following disclaimer at the bottom of all due diligence communications:

DISCLAIMER: This email was sent by a Member of the Harvard Business School Alumni Angels of Greater New York (HBS Alumni Angels). The HBS Alumni Angels serves as an alumni resource and educational organization in the area of private equity investing for alumni of HBS and Harvard University generally.  If you are not a Member of the HBS Alumni Angels and this email is not addressed to you, please disregard its contents and delete it from your Inbox.  All information presented and viewpoints expressed above are solely those of the Member sending the email, and not that of the HBS Alumni Angels or Harvard University.  This email is not an endorsement nor approval of the referenced company by the Member or the HBS Alumni Angels. Each Member of the HBS Alumni Angels is individually responsible for his/her own due diligence and research before making any investments.  Any Recipient of this email shall also treat as confidential any information of any described company shared in this email.  Should a Recipient of this email choose to make an investment in any company referenced in this email, that decision should be based on the Recipient's own personal due diligence and research. Angel investing is a high-risk activity, and you should not invest any money unless you are comfortable losing 100% of your investment. On average, early-stage investments are illiquid for 10 years.

 

Storing and Distributing Deal Documents

 

On each company’s Deal Page, at the bottom-right there is a section for members to upload documents relating to that deal. It is a file uploading tool that allows you post documents from your own device. These documents can be accessed by anyone who also has access to the deal. In HBSAANY, this almost always means the entire membership. As Deal Lead, you should use this tool to distribute all documents. This way, they are securely hosted by Gust and any member with new interest in the deal can access them.

CONFIDENTIALITY AND CONFLICTS OF INTEREST

 

Confidentiality: Deal Leads should remind members that information discussed with companies under diligence is to be kept confidential.

 

Conflicts of interest: In some cases, Deal Leads have become interested due to prior association with/investment in the company.  Please disclose to the deal team ANY economic interest or relationships you have with the company.  In no instance can a Deal Lead be in the position of taking a transactional fee as an investment banker, fundraiser, or consultant from a presenting company.

 

RECAP: DEAL LEAD AND RULES

  1. Liaise with the entrepreneur on meeting scheduling, diligence questions and likelihood and timing of HBSAANY investment. Ensure the entrepreneur has a positive experience even if no members invest.

  2. Oversee Discovery and Due Diligence.

  3. Use Gust throughout the process for deal documents, deal status updates, document posting and all other pertinent communication.

  4. Assess member interest periodically throughout the process and make the go/no go decision on behalf of HBSAANY.  When appropriate, negotiate terms.

  5. Give deal updates throughout the process to HBSAANY deal committee members and to general membership at subsequent pitch nights.

 

 

KEY CONTACTS

 

HBSAANY Board deal committee members

 

Barbara Miller                 babsangel25@gmail.com

Betsy Odita                      betsy.odita@gmail.com

Richard Davies                Richard.davies.nyc@gmail.com

 

Program Manager

Nina Wanerman              nwanerman@hbscny.org

 

HBSAANY Chairman

Jason Klein                      jasklein@gmail.com

Gust
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