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The perfect investment completion?

Before a Venture Capital investment completes, both sides of the transaction have to get through a lot paperwork. Rachel Guest explains how the right approach can make for a smooth completion process.

There is no such thing as a perfect completion. Despite all parties being committed to a deal, there will always be some small thing that doesn’t go quite to plan – an outstanding compliance document, a delay in a bank transfer, or any number of similar issues can threaten to derail a deal at the last moment. It might not seem significant, but the last thing we want to do is damage relationships with entrepreneurs and syndicate partners that we have put months of effort into building.

At Oxford Capital we try to make the completion process as smooth as possible. While every deal is different, we have a few things we always like to do to ensure everything goes well:

  • Open and direct communication – use the phone! It might seem simple but it is usually a small miscommunication that can threaten a whole deal. Don’t always rely on email – pick up the phone and talk through any issues. If a deal is right everyone should be working towards the same outcome.
  • Achievable and agreed timelines: Ensuring every party including the lawyers are all working to the same time frame from the outset can make a notable difference in the ease of completing a deal. Setting a tight deadline is a great way to keep pace and momentum, but if you are setting an unachievable target it will only increase stress and lead to avoidable errors.
  • Be upfront with compliance and internal requirements: Every firm has its own internal processes to go through, and while it might seem frustrating they do have an important purpose. At Oxford Capital we like to set out what we will need to complete a deal as early as possible. Don’t leave requests for ID to the day of completion.
  • Attention to detail: Nothing is worse than a small, overlooked error on the subscription agreement causing discrepancies down the line. A number in the wrong place has the potential to have serious consequences. Having a second or third pair of eyes check legal documents will save time in the long run.

All of this seems like common sense, but due to the complexity inherent in private company investing, important details can easily get overlooked. At Oxford Capital we invest in exciting companies that have a culture of pace. We like our investment process to be as smooth as possible, to ensure our investee companies can get on with building value.

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