Running the Round
After you have entered all the preparation information, you can submit your round information to Venture Bonsai for approval.
- A lawyer will confirm the validity of certain information, but not review your other material.
- At this stage we will also make a formal agreement between Venture Bonsai and your company about using the service as a self-service investment round tool.
- After this you can decide when you will actually launch the round.
What happens during the investment round
- After launching your investment round, all your company’s followers will get a notification that you have started a investment round.
- Anyone else can also see that you have an active investment round (in your company profile page).
- No user will however see any of the investment-round related information unless you have accepted that person to your round as a “Potential Investor”.
- This means that users can apply to become potential investors to your company’s investment round, and one by one you can either accept or reject those applications.
There are certain limitations on (due to the financial regulation) how many potential investors you can have from each country (the service will advice you on that).
During the investment round you can use the Social Due Diligence to communicate with your potential investors, you can also new documents to the Data Room and inform your potential investors about new developments you have achieved. All this communication is ONLY visible to those people who you have accepted as your Potential Investors.
You can (and you should) always check the profile of each person applying.
- You can also see whether anyone you trust yourself is actually trusting this person.
- This Network of Trust will greatly help you on deciding who to accept and who not.
- There are many people outside these circles and you can rely your decision based on other information such as LinkedIn profile, who have met this person in real life and what he is telling about himself.
- You can also also send a message to this person (or call) to find out more.
There is another discussion forum available in your company profile. We call it Social Due Diligence.
- Anybody who you have accepted as a Potential Investor can ask you a question.
- You or anybody in your team can answer those questions.
- This is the right forum to answer any questions your potential investors ask you.
- As the law requires all communication being equal to all (potential) investors, you might want to prefer this channel over for example direct one-to-one communication with each investor (as you should always tell all of them all the same information).
During the investment round, new people can request to join the round (to be Potential Investors). You can accept or reject those individually. You can check their profile and see if they are in your Network of Trust.
You can also invite any of your own contacts directly to your round, this is very handy way of spreading the word.
How Investors Invest
When one of your Potential Investors decides to Invest, the following events will take place:
- Venture Bonsai sends that person the necessary documents (such as Deed of Adherence to the Shareholders’ Agreement) to be signed electronically.
- We’re using EchoSign system for this process. You will get your own copy of the signed document as well.
- Another document with the payment instructions (to the escrow account) will be sent.
The Escrow Account is a great tool for organizing the financial transactions. It allows your potential investors to invest and not worry if there is anyone else investing in order to complete the round. Each Investor will get his money back if the minimum amount for the round is not exceeded.
After the potential investor has signed the documents and the amount has arrived to the escrow account (bank transfer may take few days), the amount will be shown on your investment round page.
The money will be released to your company when the investment round is successful. If it’s not, then the money will be paid back to the investors from the escrow account. The bank holding the escrow account will charge a fee for this activity, as defined in the agreement between the company and your company.