Hey guys, somewhat frequent lurker, first time poster.
I am new to the industry, and I am seeking some feedback on any best practices or war stories for due diligence requests from large institutional/corporate strategic investors. I apologize in advance if I missed a thread on this topic already.
I am focusing primarily on the back office because our investment process and strategy are already well defined and documented as part of the PPM and general courting process.
Put simply, do not want to get eaten up by corporate compliance staff because we did not check the right box for a back office policy or procedure - if you know what I mean.
Please note that I began by combing through the ILPA’s best practice guidance, but a lot of it seems overkill for an early stage/smaller VC firm like ours (seed through B).
Here are some specific questions that come to mind and may help facilitate discussion:
1. In your experience, is there a particular theme/topic that is a common pain point?
2. How often, if at all, have you had to implement something new as a result of an investor requirement?
3. Any good resource material out there tailored specifically to VC?
4. How heavily do you lean on 3rd party service providers (legal, fund administrators, etc.) to prepare and respond to DD questionnaires? Beyond the obvious like fund terms, etc.
5.Any perspective on complying with financial reporting/ valuation policies, compliance documentation and the like? Even more specifically, insight as to how you appease auditors with your valuation policy and avoid paying a FAS 157 specialist for hundreds of hours of work to run valuation models that are meaningless?
6. Insight on drafting/refining risk management policies around your internal controls and conflicts of interests?
Should someone be willing to share their wisdom offline, please PM me!
