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FVCP has compiled this FAQ to
answer common questions about our venture capital operations. We appreciate
feedback from entrepreneurs on how we can improve this section.
Why
doesn't FVCP sign Nondisclosure Agreements?
Like the majority of VC's, we do not sign NDA's because it would open us up to potential litigation and
would seriously limit the number and type of deals we may want to evaluate
for our portfolio. The following are links to articles that illustrate (in
serious and comical ways) why VC's do not sign NDA's:
http://news.com.com/
http://www.thevc.com/
http://www.billsnow.com/
What is FVCP's criteria for investment in my company?
FVCP invests
in promising companies and technologies that can significantly impact
people, society or the environment in a positive way. Market sectors of
interest include wellness products & services,
non or minimally-invasive medical devices, recreation & lifestyle, alternative energy
and clean tech.
Specific investment criteria can be viewed here. Please review it thoroughly before submitting
an investment proposal to us.
What is the process after I submit my executive summary
for review?
After we receive your executive summary, an FVCP associate
will review and evaluate your opportunity for investment. If we determine
your opportunity is not a good fit, we will inform you that we are not pursuing
an investment. If we determine that your opportunity may be a good fit, we
will contact you to request more information (often a full business plan,
management resumes and any other relevant information). If we are interested
in learning more after reviewing this information, we will setup a conference
call or face-to-face meeting to get to know you, your team and your opportunity
in more detail.
What type of exit strategy is FVCP looking for?
FVCP's
preferred exit strategy depends on what is most suitable for the portfolio company
and can include an initial public offering (IPO), merger, acquisition or
management buy-back.
What
is an attractive time period for a company's exit strategy?
Like most VC's, FVCP
is looking
for companies that can reach an exit event in 3 to 6 years.
Can
I raise venture capital if all I have is an idea?
Raising
venture capital with just an idea is fairly difficult . Most traditional venture firms will focus on companies that have established operations
and management and have developed or completed
its products or services. Raising capital for an idea-only business almost
always requires seed capital from Angel investors, which is typically
accomplished through a private placement.
Entrepreneurs with companies at seed-stage should review our
acceleration operations to see whether there
may be a fit.
Do
you invest in public companies, reverse mergers or PIPE's
FVCP does not invest in
public companies, reverse mergers or PIPE's.
How
much equity do I have to give up for an investment?
It
depends entirely on the amount of the investment, the valuation of the company,
the stage of the company, the future potential for growth and the proposed
exit strategy. Our best investments so far have been those where the founders and
management of the company maintained majority ownership.
Does
FVCP participate on my Board of Directors?
We
typically take a board seat if we lead the investment.
What
is FVCP's Management Involvement?
We're not bankers,
lawyers or
financial sharks interested in
taking
over your company. We're entrepreneurs turned venture capitalists with extensive
operating experience. We think like you, work with you and support you by
taking an active role in management and the board without limiting your overall
control.
What
type of return is FVCP looking for?
At
liquidation (merger, acquisition, IPO or buy-back), most early-stage VC firms
are looking for returns of about 5 to 10 times of their investment. While
returns vary by industry and deal structure, a company with lower than 3x
return on investment will have difficulty obtaining venture capital and
should consider alternative funding sources.
Are
investments by FVCP debt or equity based?
We
primarily make equity or debt/equity investments. We are not lenders and do not participate in debt-only
investments.
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