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Investment Process :
Investments generally require 60-90 days to fund from the time entrepreneurs first meet with
eTEC's
management team. After a review of an entrepreneur's written business plan and meetings with the
entrepreneur's team, the Investment Committee discusses the transaction and,
if preliminary approval is given in the course of a regularly bimonthly
meeting, issues a non-binding term sheet to the potential investee company describing the general terms under which
eTEC
is willing to enter the transaction (e.g., amount to be invested, pre-money valuation range, key terms of legal documentation, major issues to
examine in due diligence, etc.) This usually takes 10-15 days.
During the next 20-30 days, the US staff of IEP or the Indian staff of
IDEA will,on behalf of eTEC, conduct a
detailed due diligence of the potential investee company, including but not
limited to:
-- Review of market size and potential
-- Determination of competitive environment
-- Background of entrepreneurs and key management
-- Potential for customer acquisition
-- Examination of past audited and unaudited financial data
-- Projections for future revenues, expenses and profits
-- Review of detailed budgets
-- Potential for collaborative value addition by eTEC
-- Options for profitable exit of the venture investor
Due diligence findings are summarised in a report submitted to the Investment
Committee, which either approves, rejects or asks further questions regarding
the transaction. Once final Investment Committee and Board of Directors
approval is obtained, eTEC and the potential investee company proceed to work with counsel to document the
transaction. Once binding legal documentation is executed (15-30 days),
eTEC then draws down the capital from its own
investors and funds the company (15 days). At least one eTEC representative is then appointed to the Board of Directors of the new
portfolio company.
eTEC will hold its investments from 1-5 years. eTEC's policy is to only invest in transactions where its participation can make a
valuable difference to the portfolio company's performance or value in some or
all of the following ways:
-- Procurement of new customers or technology partners
-- Raising of additional finance
--
Recruitment of senior executive personnel
--
Advising on exit options through strategic sales, mergers, or public offerings
The Investment Manager may receive market-based fees for the provision
of such services as per agreement with the company. |