Entrepreneurs




“When you have to prove the value of your ideas by persuading other people to pay for them, it clears out an awful lot of woolly thinking.”

      - Tim O'Reilly

Funding Process

Raising money can be a time consuming and complex process.  We know, we've been there and have taken that experience to heart to make our process as streamlined and transparent as possible - no confusing, onerous application process; no endless mixers and meet-and-greets.  We firmly believe that management should be focused on growing their business, not managing their investors.

We believe in adding value from the start. During every step of our funding process, you will get important feedback and guidance from our members. Whether or not we choose to fund your company, you’ll find working with us to be an invaluable experience for you and your business.

Initial Screening

One of our members will review your Business Plan/Summary for completeness, fit, and potential interest to Xaphan Group.   Since we meet weekly, you can generally expect to hear from us within 5 business days of receipt of your plan.

Company Presentation

You've put a lot of thought and effort into your business and deserve our undivided attention while you pitch your company; we don’t believe in putting our potential investees on a conveyor belt in front of investors eating dinner.   Chosen companies will be invited to individually present to our local members at a mutually agreeable time and place.  The goal of this meeting is to garner significant interest and excitement from Xaphan Group members so they want to proceed with due diligence and ultimately invest in your company.

Presentations should be about 20 slides/30 minutes with an hour for Q&A.  Companies may offer other supporting materials at the meeting; the use of video and product demonstrations to add value and understanding are encouraged.  Expect to receive plenty of actionable feedback during our first meeting together.

After the meeting you will be contacted with regards to one of the following outcomes:

  • The process will end at this point due to insufficient investor interest
  • You will be asked to supply additional information
  • You will be contacted by the "deal lead" to initiate the due diligence process

Due Diligence

Often the make or break part of the funding process, due diligence is when Xaphan Group investors will do a deep dive into your company.  This is your opportunity to impress us with your detailed knowledge and understanding of your business ecosystem.

During the due diligence process, you can expect an in-depth enquiry to verify and analyze the details of your business and team including:  assessing market data, reviewing agreements & patents (if any), speaking with suppliers/customers/distributors, scrubbing of financial projections, competitive landscape, reviewing the rationale for your valuation, learning what keeps you up at night, checking references, etc.  Several informal working meetings are typical throughout the due diligence process.

The time to complete due diligence is usually driven by the entrepreneur and can typically take from one to three months.  Three factors make for an efficient and successful due diligence process: 'Be available', 'Be Prepared' and 'Full Disclosure'.

Term Sheet

If we've made it this far it means we both liked what we've seen and heard to date and have begun to form a strong relationship.   At this point a mutually agreeable Term Sheet which outlines detailed terms and conditions of the investment is negotiated and signed.  Xaphan Group seeks to achieve fair, reasonable term sheets grounded by industry standard terms & conditions and tailored to the reflect the financial and human capital being invested, as well as the uniqueness of the specific business.

Funding

Once all parties are satisfied with the terms and conditions in the Term Sheet, the final investment related agreements (share purchase, shareholder, etc.) are created and signed, and the funding can proceed.  Funds may be advanced in one payment or in a series of payments (tranches) based on specific milestones being met.

Post-Funding

Although it may have taken between three and nine months to reach this point, closing and funding represent only the beginning of our relationship.  Xaphan Group members are now partners in your company and will actively work with you to grow the company and fuel its success.

Exit

The significant payout we've all been working towards.  Xaphan Group members typically look for an exit over a three to five year period.