1 PIPELINE MANAGEMENT TOOL
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COMMUNICATING WITH COMPANIES IN THE PIPELINE WHY [INSERT INV./FUND MANAGER NAME] should strive to keep pipeline companies informed of where they are in the investment process for the sake of transparency and to build trust. The [INSERT INV./FUND MANAGER NAME]’s point of contact is responsible for providing pipeline companies with regular updates about the firm’s assessment of their business and the overall investment case. STANDARD All communications should be kind, recognize that entrepreneurs are busy, realize this process may be stressful for them, ensure it maintains a good relationship with the company and provides clear updates. EXAMPLE TEMPLATE Dear [INSERT ENTREPRENUER’S NAME], I hope you are well. Thank you for [ADD SOMETHING THAT THEY HAVE RECENTLY DONE; FOR EXAMPLE, “MEETING WITH ME” OR “PROVIDING ME WITH THE REQUESTED INFORMATION”, ETC.] I wanted to provide you with a brief update on the status of our assessment of [INSERT NAME OF PIPELINE COMPANY]. Below is a summary of the steps we go through as we assess each opportunity. I have indicated where your company is. Deal progress: 1. Meet entrepreneur and pass screening – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 2. Clearly understand the business idea and drivers – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 3. Conduct light market due diligence to gather financial assumptions – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 4. Build financial model and evaluate the return potential – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 5. Finalize and sign term sheet – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 6. Ensure [INVESTOR NETWORK NAME] commitments – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 7. Conduct and complete due diligence – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”]
2 PIPELINE MANAGEMENT TOOL
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8. Finalize legal documents – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 9. Capitalize and close investment – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] 10. Launch post-investment growth plan – [INSERT “COMPLETED”, “IN PROGRESS”, “PAUSED” OR NOT STARTED”] What we found: [PROVIDE A SUMMARY OF WHAT THE FIRM HAS FOUND AND WHY THE FIRM
HAS PAUSED AT THAT STEP] [PROVIDE A SUMMARY OF WHAT THE FIRM NEEDS TO ADVANCE PAST THIS
STEP AND ONTO THE NEXT] Next Steps: 1. [ADD ANYTHING THE FIRM PLANS TO DO IN THE COMING WEEKS] In conclusion, we will need [ADD A SUMMARY STATEMENT OF WHAT THE FRIMS NEED FROM THE PIPELINE COMPANY] Would you be available for a meeting or a short call to discuss the above? I look forward to hearing back from you.
Warm regards, [INV./FUND MANAGER REPRESENTATIVE’S NAME]