Due Diligence for Angel Investors in 2023

Everybody, welcome to the Founder Institute webinar. I am the FI co-founder and CEO Jonathan Gruetchen, and we have a very interesting event lined up for you today. So we had somewhere about 800 or so across our various platforms, angel investors, FI mentors, and just other people interested in the super early stage investing space register today. And it's not a surprise that this has been a little bit of a hot topic these last couple of months with, I mean, I think there's always high-profile companies that kind of get taken down and for good reason because there wasn't enough diligence on the front end. But I think over these last few months have been a little bit of an exception where we've just seen a lot of them. And I think as we kind of come out of this boom, that we've seen the last few years, a lot of these will be continued to be unraveled. And I personally think that we're still only at kind of the tip of the iceberg on some of the malfeasance that we'll see that happened during this boom time of the last few years. But that's why this is such a pertinent topic and that's why we line this up today with a great speaker. His name is Alexander Morsink, Managing Director of Equivesto. And hey, Alexander.

Hey.

Let me remove the spotlight here. So Alexander is based in Toronto. And Alexander, tell us a little bit about Equivesto for a second. Yeah.

So Equivesto is an online investment platform, an equity crowdfunding portal in Canada. We're also licensed as a securities dealer, specifically an exempt market dealer in Canada. So we help companies of all shapes and sizes in Canada that are private raise capital from investors, right?

And especially in the crowdfunding space, diligence is incredibly important, right? I mean, that is literally one of the, like, core value props that you guys have to have as a business in order to kind of maintain your network of investors, right?

Definitely, definitely. And one thing that I'm going to touch on in the presentation as well is in Canada, the regulatory space is slightly different, and so we're actually legally obligated to do a certain threshold level of due diligence on all companies that list on the platform. So as opposed to being just a listing service like some other platforms might be, in Canada, a fully licensed platform actually essentially is recommending investments to people. So we really have to know the details of the companies that we're putting forward.

You kind of, you have the fiduciary responsibility essentially. Exactly. Okay, awesome. Well, Alexander, why don't you fire up your presentation? And just to reiterate to everybody here on the line, this is a live event and I already see here, wow, we have people joining us from Georgia, Nigeria, Nairobi, San Francisco Bay Area, Munich, Tel Aviv, Paris. Seattle. Awesome. Tunisia, Bulgaria, Pennsylvania, Kazakhstan. This is awesome, guys. This is great to see. So just so you know, we are right now— Alex is going to go into a presentation, but after that presentation, we're just going to be going through Q&A. So if any time during the presentation, if you have any questions, you don't have to wait to the end. Okay. At any time, if he brings up anything that you have questions about, please just throw it into the chat. And we have people in the, in the chat that are in there, and they will be ready to feed those questions to us so that when he's done with the presentation, we'll just go through those one by one. All right, well, that being said, Alex, the floor is yours, and I'll, I'll hide myself on my screen.

Fantastic. Thanks everyone for joining us today, and we're going to dive into due diligence for angel investors in 2023. So we already talked a little bit about who I am and, and what I do with Equivesto. So as I mentioned, Equivesto is an online investment platform based in Canada. We can sadly only help Canadian resident investors at this time. So for all other international investors, look for platforms in your jurisdiction and your country and, and consider using those. So before diving into the presentations, I want to go over a few knowledge level assumptions. So to keep presentation very targeted. I'm gonna make the assumption that everyone listening understands what angel investing or startup investing is. You understand what the difference between a startup, uh, and a small business is, and you understand how startups raise capital and the order that they typically, uh, raise that capital in. So family and friends rounds, angel rounds, um, and you know related terms like pre-seed, seed, and Series A. Uh, if you don't know any of those terms, You can definitely read more about them through the Founders Institute and as well on the Equivesto website. We have more educational materials on that also. So today in the talk, we're gonna cover a variety of areas around due diligence, specifically what is due diligence, why do we do due diligence, the difference between verification and validation, categorizing the different parts of due diligence, the phases of due diligence, uh, how data rooms are involved in due diligence, different investment methods, uh, due diligence done by a platform, how much due diligence is enough for you, um, a few things to look out for when you're doing due diligence, some examples, and also I'm going to share a sample due diligence checklist at the end. So diving right in, what is due diligence? Technically, anytime any of you basically make any decision, including, you know, shopping at the grocery store, deciding between two brands of cookies, you are doing due diligence for that decision. It's basically gathering more information so that you can make an informed choice. In an investment context, due diligence is the work that you're doing to gather as much information about that investment decision to make sure that you are making the most logical and informed decision that makes the most sense for you. And we're really just gathering all of that information from the company about the investment to be able to do that. So why do we do due diligence to this level? Why is due diligence important? Due diligence essentially helps de-risk our investment, which is either removing risks entirely or provides further details to help us counteract risk related to that investment. So really, there's several key specific risks that face, that are faced by all early stage companies. So the first one, is the company a real company or is it fraudulent? So that's the first thing. Is it a real company? But then the first core risk is, can this business, can these founders actually create a product, right? They're a startup. They're out here trying to revolutionize one market or industry. Can they actually create the product that they're trying to make or planning to make. Once they've been able to create that product, the next question is, will there actually be demand for this product in the market? Will there be product market fit? And then if they've been able to do that and they've— you found demand, the final main problem is, will they be able to scale that product and production efficiently to drive greater profits at scale, right? Those are the key problems associated with every startup. And there's also investment-specific risks. So do I agree with the potential of this business? Do I agree with the valuation? Do I agree with the investment terms? Is my investment or ownership stake protected? So when you're doing your due diligence into a company, you're thinking about all these sort of things, you know, is this a good company? Will they be actually able to do the things that I want a company to do and any company should strive to do? And then do I actually agree with this company as an investment decision for myself? So due diligence happens in a few phases. The first phase is prior to seeing the company's pitch, when you're first learning about the company. So you probably have access to a pitch deck, executive summary, website, things like that. And this is where you can really assess or try to assess product-market fit, the problem solution, the revenue model, and competition research. You've got these materials, you're reviewing these, and you're basically doing a gut check. You're seeing, you know, does this information make sense? Is this put together well? Do I agree with the problem? Do I agree with the solution? That sort of stuff. The next step The next phase is the pitch itself. So when you actually have an opportunity to hear the company pitch, have some back and forth Q&A, and this really gives you an opportunity to validate the information from phase 1, and it lets you get to know the company and confirm things like the fit of personalities and get more information on the valuation and the terms. So this is kind of laying the groundwork. It's part of the due diligence, but this is sort of laying out everything that you want to go about actually confirming. And then after the pitch, this is when you would start doing your deep dive of your due diligence. This is when you would start gathering all these sort of additional documents and you'd be wanting to verify and validate all the information you've collected up into that point. So this is when you would be doing financial due diligence, you'd be doing reference checks, you would, uh, be going through the valuation and confirm that that makes sense to you. You'd be potentially negotiating terms. You would be deciding on whether you want to invest, you know, signing the documents and actually sending the funds to the company. Typically, depending on the amount of due diligence you would want to complete after seeing the pitch, if you're asking for really internal documents, this would typically be when an NDA or non-disclosure agreement might be signed so that you could get access to really personal internal documents. And typically, All of these documents are provided to investors via a data room, and we'll talk a little bit more about data rooms in a moment. But essentially, a data room is just an online folder filled with documents that's available to investors. So here is an example of what a data room may look like. Technically, as long as it's an online folder with stuff in it, it counts as a data room. Um, but I have different recommendations when it comes to looking at data rooms and getting access to information. Um, typically different companies will be willing to provide different levels of information to investors at different stages. Um, so I split them into 3 levels typically. So each level would have different access and different information contained within So level 1 of your data room is going to be the most public of the information that you might have access to. So that would contain your pitch deck or the company's pitch deck and the one-pager. And this would not be password protected. So this is something that, you know, companies should be more than happy to share with you right out the gate. You might even get access to this before seeing the pitch or going further in any discussions with them. Level 2 is what you should get access to typically when you've seen the pitch or you've reviewed the pitch deck and you're interested, and then you ask for access to the data room. So Level 2 is going to give you additional information that is going to help you get more comfortable with the company and understand more of what they're about and start verifying some of the information that they've provided. But, you know, you're not getting access to personal agreements between employees or anything like that. That's all still very much closed off until you would potentially sign an NDA, maybe after even signing a term sheet, and you would get access to, uh, the Level 3 data room. Some companies that are earlier stage, for example pre-seed or seed, might not even understand about creating a Level 3 data room, so they may only have a level 2 data room. Not all investors also need or ask for level 3. Typically due diligence is done based on somebody's understanding of due diligence. So if you don't know to ask for documents, you won't get them. So we find a lot of angel investors who don't have a background in venture capital investing themselves are typically not asking for the level of documentation that we as a platform, for example, would collect from investors. So as you can see on the right, I have outlined an example of a data room, and it's been sort of split into different sections to make things easier. And essentially, folder number 1 is included in the Level 1 data room, and then folders 1 through 6 or 7 is included in the Level 2 data room, and then Level 3 is all of the these additional areas all the way up to 17. You know, some of the documents that are included in potentially Level 3 would be provided as part of Level 2 depending on the company. So you might be able to get access to the cap table or some of the minute books, but most of that would be consigned to Level 3. So I mentioned a little bit earlier verification versus validation. When it comes to due diligence. And it's important to understand the difference between those two labels. And these are my personal labels. These aren't necessarily sort of accepted across the market, but I like to use them to split the type of due diligence I'm doing into two categories. So the first is verification. So before thinking about, you know, the investment decision that I'm going to make, the first thing is actually verifying the information that's been provided by the company in their pitch and in the information that they've put forward. So I'm actually confirming, okay, you know, does the startup actually exist? Is the product a real product? And then also on the legal side, you know, they're offering Class A common shares. Do those shares actually exist? What are the terms related to those shares? What are the protections that should those shares have? Okay, this person says that the founder— are they actually the founder? You know, do they actually have the degree from this school Have they actually done the things that they're saying they're doing? You're essentially double-checking all of the information that's been provided by the startup. They say they've got, you know, 6, you know, letters of intent signed with potential clients. Is that actually true? All of those things would fall under the verification category. Basically, you know, is everything here truthful and properly represented? The second category after you've done the first category is the validation category. So this is, really confirming that you agree with some of the assumptions that they're making about the potential for the business. Do I agree with the business plan? Do I agree with the target market? Do I think the valuation is fair? Do I agree with the terms of the investment? Do I agree with their strategy? This is where you're using your skill as an angel investor to sort of determine if, okay, the risk-reward of this business, this team, at this price, is this the right kind of investment decision for me? But you're only moving to step 2 once you've finished what you need to do to feel comfortable with step 1. So inside both of those categories, step 1 and step 2, these are the sort of underlying categories of due diligence and the types of information that you'd want to collect to really be able to do both your verification and your validation. So on the verification side, you're wanting to collect the core materials around the business. So the corporate governance documents, anything around intellectual property, anything around infrastructure and tax litigation, that is all verification-based. Also, legal due diligence would be verification-based. So the articles of incorporation, does the company actually exist? Do they have a shareholders agreement between the other shareholders and what are my rights as a shareholder? The term sheet actually outlining the terms of the investment and any other industry-dependent legal licenses. For example, if you were looking to invest in my company Equivesto, you would want to confirm that we actually have the proper licenses to be able to operate as an online investment platform. So you would want to say, okay, Alex, show me the proof that, you know, you do have the license as an exempt market dealer, and, you know, there's no limitations on that license, and you're properly registered, and all your employees are registered, and that's all correct and upstanding. And then verifying the company information would also be a part of the verification. So the legality of the company itself. So you've seen the articles of incorporation, but are you checking those with the registry wherever they've been incorporated? Is there any other government regulation or compliance that the founders need to be meeting to be operating as a business? And then of course, background checks and ID checks on all of the founders and, and top managers of the company. When we then switch to part 2, the validation piece, this is where we're starting to look at, okay, the other information being provided by the company that is essentially the basis for their valuation, the terms of investment, and their potential as a startup. So you're doing financial due diligence, you're looking at the existing financials, you're looking at potential projections, and if what the sort of existing debt or financing structure has been like. You're doing reference checks. So if they provided references, you're calling those to see, you know, the information to confirm the quality of the founding team members. This is where you're also doing some technical due diligence. So you're looking at the company metrics, its sales or revenue, their market research, their product stage. You're looking to see, you know, the assumptions they're making, whether you think they'll actually be able to scale at the rate that they're targeting, you know, what their internal costs look like, everything like that. And then of course, the investment terms themselves. So the valuation, the share class, the structure, is it a SAFE note? Is it equity? Is it convertible debt? All of those pieces are also part of the validation stage. So you understand the different categories of due diligence and how those are needing to be done as part of making an investment. But the amount of due diligence that you have to do as an individual changes depending on the investment method that you use. For example, if you're investing on your own, all of the due diligence that's taking place, you have to do by yourself. So this entire list, you're doing as much due diligence on this list as you feel comfortable doing. Some investors feel comfortable doing less due diligence. So they'd say, you know what, okay, I've reviewed the deck, I've seen the articles of incorporation, the company does exist, I'm okay with the, you know, shareholders agreement, I'm okay with the valuation and the term sheet, I'm just going to invest. I'm not as worried about, you know, all of these other sort of legal checks, reference checks. I'm not as focused. I really believe in this founder. I'm good to move ahead. However, some investors are looking for more information. But when you're investing on your own, it's up to you to decide how much due diligence you want to do. If you're investing via an angel group, you get to benefit from some of the due diligence that's done by the group. So typically, angel groups will meet, you know, once a month. The group itself will have a sort of vetting committee that'll decide which companies get to come forward and pitch. And so you're already benefiting from the sort of initial vetting that the management is doing to determine which companies can come and pitch you. So there's some initial validation being done there. And then you're also benefiting because typically when the angels decide to invest, you know, it's a show of hands which angels want to participate. But then after that point, those angels will typically work together to assist each other on the due diligence. So you get to benefit and learn from a number of other angels also doing due diligence at the same time as you, but you and that group who decide to participate will still need to do most of the activities on this list. And then finally, the, the last option is investing via an investment platform. So some due diligence, some of the information on the list is being reviewed and confirmed by the platform. However, it's very important for you to understand the differences between different platforms in different jurisdictions and understand what due diligence are they doing versus what due diligence do you still need to do as an individual. So let's dive into due diligence done with a platform for a moment. So platforms can make it easier for you as an investor by completing some of the due diligence. But as I mentioned, it really is different country to country. And so The due diligence that one platform would do in the US is not the same as the due diligence that, you know, a platform in Israel or in Australia might do. And so it's important for you to understand the different licensing requirements and due diligence requirements put on those platforms by their local regulators. So in the US, most equity crowdfunding platforms are not licensed securities dealers. And so they're not required to do extensive due diligence into each company. I've chosen Wefunder because they have the largest investor base, and Equivesto is also, you know, we work with Wefunder a fair amount. From Wefunder directly on their website, no company on Wefunder, no matter where it appears on our website, is endorsed by Wefunder. Also, while they, while Wefunder may help some companies make their profiles look pretty, all the information is provided and fact-checked by the companies, not by WeFunder. They do do their best to screen for fraud, so they do research the founders and verify that the documents comply with the law, but they're not doing any other due diligence beyond that. So it's important to keep that in mind when leveraging a platform like WeFunder. So they're doing some, you know, initial spot checking, but really the vast majority of the due diligence would still need to be done by you as an investor. In Canada, where Equivesto is based, it's a little bit different. So most platforms are licensed as exempt market dealers, including Equivesto, uh, which is a securities dealer. So we have to complete a due diligence process called know your product on all companies before we can allow them to raise on the platform. And I categorize our due diligence process as essentially a large portion of the verification process. So if we go back quickly 2 slides, a lot of the verification information on the left, so is the company legally set up? Do they have the right legal documents? Is there any sort of industry-dependent legal licenses or approvals needed? Do they have the shareholders agreement? Is it properly structured? Do they have the incorporation? Do they own the IP? All that sort of stuff, including the background checks, the ID checks, criminal checks, that's all being done by a platform like Equivesto. So the validation information on the right, you know, do you agree with their valuation? Do you agree with the investment terms? Do you think that this is a good investment for you? Do you think that, you know, you agree with their market research and the growth potential of the industry? Those decisions still remain with you as an investor, but the verification piece in Canada is typically done by the platform. So it's important to sort of keep those in mind because that can make things easier. But you also don't want to go in thinking the platform is doing a lot of due diligence when they're actually potentially doing a little bit less. So if you do invest with a platform, make sure to sort of confirm that. How much due diligence is enough due diligence? So it really depends on the stage of the company and on you as an investor. This presentation is kind of going through everything that you could want to know, hopefully, around due diligence. And I'm going overly, uh, in detail and overly in depth about all the different areas of due diligence. But that doesn't mean it's necessarily applicable to do that for every single company you're considering to invest into. The first thing is figuring out yourself How much due diligence do you need to feel comfortable to make an investment? So it's really dependent sort of person to person based on what you feel comfortable not only asking for and reviewing, but also your competency in actually reviewing those materials. You know, if you don't have a strong legal background, asking for, you know, dozens and dozens of pages of corporate minute books isn't necessarily gonna help you with the due diligence if you don't feel comfortable actually reading those documents and getting something of value from them. Also, it's important to keep in mind the stage of the company. Earlier stage companies typically have much fewer documents and are typically not as legally organized. For example, family and friends round, you know, pre-seed, seed rounds, those companies are typically just creating their initial MVP or just going to market. And so they're not going to have all sorts of client agreements. They're not going to have 50 different employees and employee agreements that might be provided when, you know, doing due diligence of a Series A or, you know, a Series F company, which is much, much larger, and the investment amount, you know, is being made by a PE firm and it's much larger as well. So when you're thinking about investing in really angel-level early-stage companies, you wanna keep in mind, okay, this is a startup. Maybe they've got no, they've had no sales so far. So all they've done is actually create the product. The due diligence that you can do there is, is much more reduced and it becomes more about getting to know the founders and, you know, do you feel comfortable on the validation side where on the verification side there's not as much to actually verify. So it's important to keep in mind that, you know, as companies get larger, you'll want to probably be doing much more due diligence. But for smaller early-stage companies, it's a little bit more of a gut feeling piece, as there is less physical materials to do due diligence on. A few things to look out for. So these are just some high-level points that I would mention that we typically scan for for any company that's looking to raise capital through us, or, you know, when I'm acting as an angel investor on my own, these are things that I look out for. Now, these are not necessarily red flags, as in if I see them, I won't invest. They're more orange flags. So they would be something that would be concerning, but would trigger me to have more conversations with the company, potentially to kind of guide them to reframe the way they provided this information, or to get additional detail. So the first is they have, they say they have no competitors, or there's no competitors in the pitch deck, or they are missing competitors that you know about. I think every company has a competitor, whether it's a direct competitor or a substitute good. And so it's important for the founders of a startup to be at least aware of who their competitors are in the space. Even if, you know, they don't necessarily feel threatened by that competitor, they still want to be aware of who those people are. So they're saying they have no competitors. That would typically lead me to want to ask them to learn to— I would want to ask more questions to learn more about why they think that. But I would also encourage them to do some additional research. Certainly, if there are competitors to the company that I know about that they don't, that would be something that I would definitely raise with the company. The next would be weak assumptions in the financial projections. Typically, early, early-stage company financial projections are not achievable or realistic, and they have the really nice hockey stick shape. And I go in expecting the hockey stick, so I'm not upset or frustrated when I see the hockey stick at all. I actually want to see the hockey stick because I want to see the potential of a company, I wanna see that the founders really believe in the future potential and the growth of the business. But at the same time, even with hockey stick projections, I wanna make sure that the assumptions that the founders are making leading to these, you know, hockey sticks are realistic and have a basis in reality. I don't wanna see that they have 700% annual growth with no increase in sales staff, or marketing costs or anything even to be able to service that growth. I want to understand that they understand how the growth of a company actually works and how all those pieces connect together to result in, you know, potential returns. Next, I'm looking to see is the legal paperwork properly prepared. If I'm going to invest in a company, I want to make sure they do have a shareholders agreement that is set up, you know, the shares to the founders have actually been properly issued. I always feel nervous investing in a company that hasn't really done a lot of that before. Oh, there's no shareholders agreement. Oh, we don't have, you know, any official shares that have been issued so far. We're all basically, you know, going off of verbal agreements or handshake agreements. That can definitely become messy. So as an external investor, I want to make sure that that's kind of buttoned up and organized before I would participate. Tied to that is any sort of undocumented shareholders' loans or other financings. Typically, when a company is new, founders will put in money as needed to help it get going, and it's good that they've done that. However, when I'm investing, I want to make sure that any money that the founder has loaned to the company or has put in as equity investments has been properly documented and papered so that that doesn't become an issue going forward. The last thing you want is to invest in a company and everything go great, and then 6 years down the road when the company's big, the founder comes back and says, oh yeah, by the way, I put an additional $20,000 into the company, you know, way, way back before anybody invested, and I want that to be reflected with, you know, 10% interest, or I want, you know, to have additional shares given to me based on the valuation at that time. You wanna make sure all those things are properly documented and organized. Another thing that concerns me, and, and this, you know, connects a little bit to the FTX scenario, is lack of understanding of government regulation in the company's industry. So as a licensed and regulated platform ourselves, government regulation and compliance is very important to us. And so my experience in that area really drives me to make sure to see that in the companies that I'm looking for. For example, if a company is creating a platform to allow real estate offerings, does that platform need to have a real estate broker's license or do they not? Why don't they? And if a platform is entering a market, you don't want to basically just go off of them saying, oh, this is unregulated. Oh, you know, there's no rules here or whatever. You probably want to take some time yourself to review the regulatory situation and understand the environment If a company is choosing to break regulation and you're investing in them because you're believing that they're going to sort of change the regulatory framework in the future, you can do that. But it's just important for you as an investor to be aware, okay, I'm investing in a company right now that is technically doing something that is illegal, and I'm hoping or I'm believing that their sort of disruption of the market will result in a regulatory change that will make it legal. For example, being a cryptocurrency trading platform in Canada actually requires companies to be licensed as an exempt market dealer, the same kind of license that we have as an equity crowdfunding platform. FTX did not ever have that license. And so looking at the market that FTX was operating in, FTX was operating in Canada and they were actually doing it illegally. So for myself as an investor, looking at some of these crypto companies, I would say, okay, have they actually looked at the regulatory framework in the companies that, in the countries, sorry, that they're operating in? Do they care about actually following that or do they have no regard for any of that sort of regulatory framework? How does that impact my decision to participate? Because while regulatory oversight can be a serious burden, it typically includes additional protections for clients of those businesses around, you know, maintenance and tracking of client holdings, separating those from operational holdings, things like that. The last thing that I would look out for is an overreliance on social media marketing in a company's growth plan. So if a company is just going to market or hasn't gone to market yet, and their only answer for how they're going to really grow and scale is they're going to do social media marketing and they're just going to spend 20% of all revenues on marketing, that's definitely an orange flag that, that, you know, I want to see more details. I don't want them to just rely on social media marketing without understanding if it's actually going to work. Let's dive into a few examples of things to look for when doing due diligence. So if we look at this financial projection on the screen, We can see a sort of breakdown of sales. It's essentially a series of income statements for 5 years for this company. So we, we show some users at the top, revenue from those users, and then a variety of expenses. So some things that stand out to me from this is if we look at the number of users they have, they don't list any user churn. So they're assuming 100% retention rate for all users. That's an immediate flag. The second is because they haven't launched yet, this is an untested business model. And so as a result, all of their cost per lead numbers are also unvalidated. They haven't provided any assumptions or any additional details in other tabs of this Excel file to talk about how they know it's gonna cost $10,000 per lead or $83,000 per lead instead of a lot more or a lot less. They've just got, you know, $1 per lead from Google Ads, $333 per lead from B2B. And that assumption remains static for the entire 5 years, no change. They also have really, really large conversion numbers from leads to users, which I think is also typically unrealistic for attracting and converting new clients, and this is a technology-driven company. But if we look at their actual technology cost as they're growing in scale, there's almost no change, and technology cost remains rather flat. So they've got, you know, technology costs at $300,000 basically for the first 3 years, and then $200,000 for the next 2 years, and they're going from $300,000 in annual revenue to $132 million in annual revenue. And their technology costs are going down. So that's also a big flag. And then tied to that sort of rapid scaling, but not scaling in costs, we're not really seeing any growth in wages and benefits as they scale. They've got over 1,000 projects that they're doing in year 5, but they have a team of roughly 10 people in total if we look at the actual salaries, wages, and benefits breakdown. Including— and that, and that 10 people would include their full customer support team. So they've gone from basically needing 3 people to manage, um, 20 projects to 10 people to manage 1,000. So that ratio obviously doesn't line up very well. Let's go to another example. This would be a shareholders agreement. So I've grabbed a couple clauses out of one shareholders agreement that would sort of be something that I would be looking out for when reading over or reviewing a shareholders agreement. The first thing that you wanna make sure you're confirming is what type of shares are you buying and what are the rights of those shares compared to the rights of other share types that exist? You also wanna make sure as a shareholder, do you have tag-along and drag-along rights? These rights essentially protect you so that if the founder, for example, was to sell their shares, to an acquirer, the acquirer has to acquire the same ratio of shares from everyone. So the founder can't sell their shares to an acquiring business but keep all of the minority shareholders trapped in the company. Everybody gets to exit at once. And then the last thing you wanna make sure to look for is do other share classes have significantly more control than you? Typically, the founder initially, certainly at an angel stage of investment, is gonna have much more control than angels who are investing. I have no problem with that. What I want to see is, is the founder setting up the business in a way where they wanna have an iron grip on the company no matter what? Or are they building a system of governance structure around them where there's multiple other people who are operating sort of checks and balances on the founder, but the founder's just making sure that the people who have those checks and balances are people that they respect and trust. I don't want to be investing in a situation where the founder has a million percent control of the company. What I'd much rather have is the founder have 50 or 40 or 30% of the company, but the other people on the board of directors or the other members in control positions of the business are individuals who the founder really trusts, and the founder wants them to have that potential check on their control to make sure that what's being done is always the right choice for the business itself. In the example that I've provided, let's look a little bit more in detail. So in this company, there's a number of different share classes. As an investor, it's not outlined here, but the investor is being offered Class E shares, and there's this other share class that I've highlighted here, which is the Class A share class, which is the founder shares. So Class A shares are able to go and vote in all of the meetings, but Class A shares can cast 3 votes in every meeting compared to every 1 vote for every other share class. So already the founder has tripled their voting control at shareholders meetings. Next, each holder of the shares can nominate 1 member to the board of directors. That's fine. And the Class A shares will receive dividends alongside other shares, you know, if they're issued, that's fine. But the fact that the founder's getting 3 shares per— 3 votes, sorry, per share is definitely something that concerns me a little bit. And then when I look further, and this was a lower section in the agreement, I look further and I note that for the board of directors meetings, only Class A founder shareholders can be eligible to serve as the chairperson. And then the chairperson of the board gets an additional 3 votes. But the board of directors is only 3 members. I see now that the control is entirely held with the founder. So not only does the founder get triple voting power at all shareholders meetings, but also the founder on a board of 3 people is also the chairperson of the board and gets an extra 3 votes. At the board level, so they have absolute control. There's not a single check or balance on their control at any level. So that is something where that would potentially concern me when investing in a company. Let's move to the next example: shareholders' loans. So as I mentioned a little bit earlier, typically founders will, uh, put money into the company when needed early on to help the company get started and grow. That's very positive, and it's great that the founder is doing that to help the company get started. What matters is making sure that those shareholders' loans have been properly documented, whether they are a loan, as I mentioned, or an equity investment into the company with additional shares being given to the founder in exchange for that capital. You just want to make sure that however the money went into the business from the founder, that's been properly documented. Also, if it's a shareholder's loan, you want to make sure that that loan has been subordinated, so the, the loan ranks lower than other loans issued by the company, so that it's easy for the company to go out and get, you know, an operating line or a credit card if they need to. I've put an example here of a great shareholder's loan set of terms, so I'm really happy with all these terms. Essentially The lender agrees that the loan will bear no interest. They're subordinating themselves to all other loans. There's no fixed repayment period, and it's going to be repaid at the discretion of the board of directors. So essentially it'll be repaid much, much later, and then it's confirming the amount that has been loaned. So that's exactly what we want to see from a subordination shareholders loan agreement. So there's one other item that I want to talk about, and this is a bit more of a Canadian-specific example, but when investing through a platform, if you're participating in an equity crowdfunding offering, typically different regulatory frameworks, so different countries will require some sort of additional document be prepared and offered to investors by the company that's doing the equity crowdfunding. So in Canada, that document is called an offering document, and it's required for all equity crowdfunding campaigns in Canada. This document contains everything an investor would need to know about making the investment, including a potential risk section. So this example that I've put here is the beginning portion of a risk factor section. This will actually go on for 2 to 3 pages. So as an investor, if you're choosing to use an online investment platform, I highly recommend that you look for any required disclosure documentation put forward to investors by the platform about the company and review that to see if there's additional disclosures there. When raising capital on the Equivesto platform from angel investors only, this documentation is not required to be put forward to investors, and it does provide considerably more information to investors. So in this situation, there's actually more due diligence information available and more information verified for investors participating through equity crowdfunding. And so if those documents are available to you as an investor, I would recommend that you take advantage of them and give them a review. Finally, in closing, I would mention that there is a due diligence checklist that we have on the Equivesto website that you're more than welcome to download for free. I think they'll also put that in the chat. I will note, as I described earlier about what amount of due diligence is right for you, this due diligence checklist is a comprehensive, you know, Series B, C, IPO-level due diligence checklist. It contains every piece of information you would ever think about asking for when it comes to due diligence. So you as an investor, can take this as a tool, but definitely, uh, you're probably gonna wanna cut down the list considerably to a much, much shorter list of items that you think are of the utmost importance for you to verify as part of your due diligence process. And of course, keep in mind, earlier stage companies at the pre-seed and seed level would typically have a very limited amount of the documents actually available. So you will probably only be able to gather maybe 5 or 10 of the different documents listed as opposed to, you know, the 100 or 200-odd documents in the checklist itself. But that's the end of my presentation on due diligence. Thank you very much, everyone, for your time, and I'm looking forward to diving into your questions now.

That was awesome, Alex. And yeah, that might be the most comprehensive due diligence presentation I've seen. So thank you for that. And we did put the chat in, or we did put the link to the checklist, which is even more, uh, more in-depth. Yeah, right, IPO level of due diligence, uh, as well. And we will include that in the follow-up email, which will also include the video. Um, are you cool with, uh, sharing the presentation as well, Alex?

Certainly, yeah, happy to provide the presentation as well. Um, I can send that over to you, um, afterwards.

Yeah, shoot that over and we will include that in the follow-up email. Give us a day or two to to send that out to anybody in the chat. But, but that was awesome. So let me, okay, couple, couple of questions here first, just a little bit of house cleaning. So yes, well, so many people were asking, were you gonna share the video in the presentation? So yes, we'll show the video in the presentation. A lot of people were asking about NDAs and I think, I think there was a misconception there because this is certainly feedback that we give to our founders as well is you don't ask for an NDA to pitch your business. right?

Correct.

And that's not what we're saying here. We're saying that once you start sharing the data room and the in-depth information, that's when NDAs come into play.

Yes. Thank you so much. I, I should have made that clear in my presentation. I apologize. Let me just hop right back and I'll be very clear. So if the founder is asking for an NDA before they've sent you the pitch deck or they've pitched you or anything like that, that's obviously a red flag. Yeah, certainly nobody's signing NDAs at that level. So typically investing as an angel at the pre-seed or seed level, the company probably only has documents going to level 2 of their data room. Level 3 probably doesn't even exist for an early stage company. And so you're only getting the NDA when you're getting to the level 3. And let me talk about sort of what I mean. So level 2, that's the level of data room that you would get when you ask for access to the data room or you want more information to invest in an early-stage company. This is gonna have things like, you know, the shareholders agreement, the articles of incorporation, the projections, potentially financial statements, or, you know, a business plan. That's what's gonna be in the level 2. Any information confirming ownership of IP or something like that. That's all in the level 2. Level 3 would be partnership agreements between them and other corporations. It would be every employment agreement with every employee. It would be every single share issuance the company has ever done. It would be every board meeting minute that the company has ever taken. Small companies probably don't even realize that they need to take board meeting minutes. So level 3 is the level of due diligence that for example, a full Series A or Series B VC firm would be asking a startup for when the company has, you know, a million in revenue already and the VC wants to see every single contract with every client the company has ever signed. That is the level 3 level of due diligence. And so as a company, you are never sharing these very private personal documents until an NDA is signed. But when it comes to business plan, pitch deck projections, that would be in your level 2 data room, but you're certainly not asking for an NDA at that level. That would be— it wouldn't be— sure, it's a red flag, but it really just shows that the founder is new to the space. They don't understand how it works. And so either you can take the emotional burden of trying to argue with them and explain it, or you can just send them this presentation or send them to Founders Institute or Equivesto. And we'll sort them out. But hopefully that answers your question about NDAs.

And I love the structure you put here too on the data rooms for any founders in attendance today. It just makes it super simple there, you know, in terms of having these different levels and tiers, so to speak, in order to control information. Because I do see, I see a lot of information overshared. That's for sure. Especially early on in the process. Like, an investor will just say, oh yeah, I'm interested, send me more information. And then they just send this whole dump, and I'm like, right, no, don't do that. But yeah, so I think this is great. There were a couple other questions as well on data rooms. A couple people asked, you know, is there a specific platform that you recommend or that you think is you know, that you see used the most that an investor might encourage some of their founders to use if they haven't set up one yet?

I think DocSend is used quite a lot. Um, personally, uh, we do everything on SharePoint at Equivesto, and so for us, it's easy for us to spin up individual SharePoints for any company that we work with. So we use SharePoint. Some people use Google Drive because it's free. Um, it's really the only difference is the amount of visibility you want to have on who's getting access and how long they're spending as a founder. So DocuSend lets you actually see how long did they read my presentation, who opened it, how long did they spend there. So that's why some people choose that. Um, we can do something similar through SharePoint as an admin controlling multiple SharePoints, so that's why we do that. But if you just, you don't have a lot of time and you just want to create a Google Drive and you're going to send one link to one folder, which is kind of the level 1, and you've got a different folder over here which is the level 2, and you send that when they for it, it gets the job done. So as long as you kind of organize things in the folders, then you should be fine.

Okay. So I have questions here from both kind of the founder perspective and the investor perspective, and I'll try to kind of switch between them. So from the investor perspective, you know, you talked a lot about, you know, you can kind of call them platforms at a high level, right? A platform could literally be like a website, right? Like So what was the one you used?

Like WeFunder?

Yeah, WeFunder.

Yeah.

Right. And it seems like just if you're going to do something like that, it seems like the devil's kind of in the details and on the fine print where you want to see exactly what burden of due diligence that platform is taking on.

Right.

With an angel group. And I know that not all angel groups are created equally. Right, right. Um, but how, you know, in general, do you think they do a pretty decent job? And also, if somebody, if an angel were joining an angel group or part of an angel group, what are the kinds of questions, or where might they find the information as to what, you know, what level of due diligence is actually getting done?

Right. And, and I, I will mention, I am an angel investor. I'm a member of a local angel group here. Um, and one thing that I that I've found just from personal experience is most angel groups, uh, and most angel investors as a whole actually focus on the validation portion of due diligence and not as much on the verification portion of due diligence. So when the angel group is doing the vetting, for example, to see who's gonna come and pitch, the focus is mostly around, okay, is the company the right stage? Is their pitch deck in the right order? You know, is there kind of a feeling of product market fit? Does the business model make sense? They're doing the actual like, okay, is this a real business? Does this business have potential? They're focused on, as they should be, is this going to be a place that could potentially generate returns that our members would want to see? So they're like, okay, they're getting, you know, 200 applications a month. They're showing you 4. So they're basically going from 200 to 4. Based purely on does this business make sense? Is it around the stage that angels typically invest in? Is there real potential here? From what we've seen, that's great. Um, the work into the actual verification piece, that's much more extensive. And so typically that's not actually going to start until there's interest from investors. And so that's something that the angels would have to do on their own. I would note that there is sometimes additional due diligence support. So in Canada, for example, angel groups can actually apply to the government for a subsidy, and the government will give them funds to pay an accounting firm to do a validation analysis. So it's a due diligence analysis, but again, the focus is on the validation perspective. So they will actually go through the pitch deck, they will look and see, Are there any competitors that they've missed? You know, what do the financial projections look like? Or, you know, do the assumptions make sense? That is an additionally extensive due diligence that this accounting firm is doing that angels in Canada can take advantage of. But again, that's still not covering as much of the verification piece. One challenge that most angels need to keep in mind is almost nobody is going to, on your behalf, go through and review the legal structure of the agreement, review the shareholders agreement, review the term sheet, review the, the, uh, the articles of incorporation to make sure, okay, all this stuff actually is correct unless it's required like on a platform like Equivesto. So we're doing that piece that, that usually you would have to do by yourself, um, but different angel groups will do it differently. So I think you would want to sort of, when signing up to an angel group or becoming a member, you'd want to say, okay, Do you do any vetting of the deals before they pitch? Do you assist with any due diligence? What does that look like? And they'll probably say, yep, we review the pitch decks when they come in. You know, we make sure that they're the right sort of company, they're suitable for pitching to the group. And you'll kind of learn from that conversation, okay, they're essentially doing, um, where is it, this piece.

They're doing the product market fit, problem solution, revenue model, It's the fun part, basically.

It's the part that you can do with just a pitch deck because that's pretty much what they've got. So they're doing that bit first. They're saying, okay, I think these things kind of make sense so that you as the investor can focus more on the, do I like the valuation? Do I think this deal makes sense for me? That kind of bit, which is also the fun part, but it does leave the financial due diligence reference checks, you know, that sort of stuff for you later on. And that's where it's really up to you as an angel to lead that.

And it's funny because a lot of times when there's high, very high-profile circumstances like this, right, you'll often see in the press like, oh, this person said they were a Harvard grad or something, right? But we called Harvard, they never heard of them, or whatever, right? Like, um, so is there, uh, as far as that verification side goes, I mean, it's sort of a it's sort of a black hole. I mean, is there, do you see any organizations doing that? Like, I mean, so what does Equivesto do, for example? I mean, is it just basic background checks using online services, things like that?

Yeah, so we as a platform, as I mentioned, we have to do something called know your product. So in Canada, as an exempt market dealer, not only do we have to verify this information from the company before we put it on the platform, but we are seen as legally providing this company as an investment product to investors. And we actually have to make sure that this investment product is suitable for that investor. And so the know your product process we have to complete is essentially we need to get to know the company that we're putting on the platform and make sure that this is a real investment and the information that we're helping bring to that investor is correct information for the amount that we're able to verify. So for example, if the founder is saying, if the founder is using a piece of their information as a core reason why you should invest, that is something we will aggressively double or triple check, including, you know, confirming, calling the university, things like that. If the founder is like, okay, you know, I went to the University of Phoenix online and I have a degree in photography and I'm starting a business in neuroscience, that not necessarily as relevant in verifying. So we wouldn't necessarily go and sort of double-check that. But if the founder is saying, I have a PhD in neuroscience from Harvard and I did my MD at Johns Hopkins and I've invented this neuroscience program, we will double-check that and make sure that that's all actually true. I think it's funny that even the United States Congress is having some trouble, I think, with George Santos verifying, you know, where he went to school or what he did. And so they're pulling all the investors up about FTX and saying, you didn't verify all this and this is all fraud. And then anyways, if you're in a glass house, don't throw a stone. But I think doing verification and validation in your due diligence is very important.

Yeah, it's kind of the boring part, as I said, right? I think everybody loves to look at a pitch deck and be like, oh, I think this I think this won't be true or whatever, but to actually say, okay, are all these things true that you're saying about yourself? So many people just rely on LinkedIn and just kind of see it as the truth, right? Or so another kind of related question. So platforms, angel groups and things like that is, you know, and Emmanuel or @Emmanuel was asking this question is, you know, if you're looking out, if you're looking to carry out DD and you're a follow-on investor, you know, and in which case there's a lead investor, Yes. Right. Which is sort of a variation, right? I mean, not— it's— they're the lead investors, so they take on a little bit of a larger responsibility. And at least in practice, even though it's not codified in any contracts or anything, right, the lead investor is sort of putting their reputation on the line. Right. So it is very common for angels or follow-ons to kind of rely on them more for the due diligence.

100%. And we see that pretty frequently. There's a reason why most people say they don't want to be the lead, and it's not because they don't want to be the first investor. It may be that, but usually it's because being the lead has the connotation of not only are you doing the brunt of the due diligence, but you're also essentially setting the investment terms. You're determining the valuation and you're agreeing on the terms, you know, convertible notes, SAFE, equity that's being invested in. And so typically Some investors are nervous about taking on that responsibility and sort of—

You're the appraiser.

Exactly, being the lead. And so that's sometimes where, you know, leveraging a platform can be helpful as well, because we sort of assist and do some of that structuring. But yeah, I think typically angel groups, because they have that experience, they're more willing to lead. Or obviously if you have an earlier stage VC, they're a professional corporation, a company, sorry, not a corporation that does this. They are also, you know, well positioned to be the lead or something like that. So we'll often see those situations, but it's really about, to be honest, your personal experience as an angel, right? If you feel comfortable going forward and picking a valuation and writing the first check and doing that due diligence, and so you're comfortable being the lead, then we always need more leads. So there's no problem with that. But also, as an investor following on after a lead, I wouldn't necessarily just take everything that is being said by the lead at face value. That's where you can sometimes, you know, you get some of these sort of celebrity-led investments where it's—

that's where FOMO happens.

100%. Somebody fancy, and there's like 5 minutes, and you're like, okay, I gotta write my $100K check and get it in. And you, you know, everybody's just kind of piling in, and you have to make that choice. Do I want to take that chance and do no due diligence and just believe these people, Or do I wanna potentially miss out on the deal, get a little bit more documentation and sort of check for myself? And of course, if you're asking a lead for due diligence, you wanna do it in, in a way that's not gonna make them defensive. You don't wanna come in and be like, hey, I think you're a liar, send me all the stuff. But certainly, you know, asking for any sort of confirmation or additional materials are helpful. Typically, if a VC is going to lead, they will write an investment memo or an investment letter. Outlining why they have made the decision that they have. And so you can ask for that typically and, and review that. Um, but typically, to be honest, there isn't usually like a VC lead and then a bunch of angel follow-ons. Typically, if it's a VC lead, you're already into the kind of Series A, B, VC-only rounds. So you just need to kind of be aware of those pieces.

Okay. And I'll just make a couple other points here. Then I do want to just get— there were a couple of questions kind of from the founder perspective, which I think is is super interesting for everybody on the line here, but I don't want to take up too much more of your time, Alex. You've been very generous with us here. So I loved, for example, the orange flags, right? No competitors, right? That's— it's either ignorance or laziness, you know, when we see something like that, especially, you know, things to look out for as well. You know, if it's a consumer business, I think what a lot of people don't understand is, yeah, like they'll say social media marketing, another one will just be as PR. Right. It's like, what's your marketing plan? PR, social media, right? Like, this is a common one we'll see. And especially if it's a consumer kind of business, it's like that is in a lot of cases the innovation is how you get customers, right? So 100% to put no time or thought into that is a huge red flag. And I think when you got into the financial projection side as well, it was super interesting because it's, look, you get these financial projections and there's 1,000 numbers in there, right? But it's basically depending on the kind of business. You should be focusing in on a number of different metrics specific to that business, right? So if it's subscription, like, look at the churn rate, right? Or also just look for numbers that are just ridiculously too high. I don't know, any kind of conversion rate over probably 20-30% or so, you're probably gonna wanna hone in on that a little bit, right? Any other places like to just, because a lot of times I just know that, you know, a lot of spreadsheets will get passed around and people just look at it and they're like, I don't even know what to make of this. Right? Like any other feedback on how somebody can kind of hone in on the right places in that spreadsheet?

Yeah. So whenever I'm doing due diligence around the validation piece of a company, I'm always looking at what I'm doing around the why. I'm always looking to de-risk my investment. And so I'm thinking about these 3 questions here in early-stage company-specific risks. Can they create a real product? Will there be demand for this product from the market? And then once demand is found, will they be able to scale production efficiently to drive greater profits? So when I'm looking at the financial projections, let's go to my example really quick. When I'm looking at the financial projections, I basically wanna see, okay, are they able to properly demonstrate product market fit somehow? So for example, if they haven't launched yet, do they have somewhere else some level of traction? So they've got user signups or something that they're tying in. And then really when it comes to their ability to scale the business realistically, I'm always looking at the scaling factors. Okay? So we're in year 1. And we're ending up in year 5, do they have the awareness and the skills to realistically think about things that'll happen when a business gets bigger? And so any of us as, you know, angel investors, we've thought about and we've operated in different businesses in our lives to, you know, generate the experience and the wealth that we have, you know, to get here. And so when we're looking at that from our own experience, we can look and find examples of, okay, You know, I know I worked at a big bank and the big bank is XYZ size, but we had XYZ employees to cover this. And like, think about how many people, like, they've got here 250,000 users using this thing. So, okay, 250,000 users. What would anyone need to have to support 250,000 users? And then you wanna be kind of thinking about, all of those pieces and, and where they are. Or you're thinking about scaling, right? You're thinking about scaling the sales. Revenue is a great driver for business success and potential for investment. So I'm looking at this and I'm saying, okay, there's— there, the number of projects are going way up, and that's driving, you know, their, their revenues way, way up. How are they growing these year over year? What's driving this mega growth, 400% growth from year 2 to year 3. What's driving that growth? And is that properly reflected in the costs? And does it make sense? You know, it's not like someone just enters the market and suddenly everybody knows about them and it costs them nothing and they're just sort of taking off. Even if the company's plan is to go viral on TikTok, going viral one time does not sell your product. You need to figure out how to go viral all the time. And then you're competing with essentially every TikTok creator ever who wants to be going viral all the time. So simply saying, oh, social media marketing is gonna drive us, that's not gonna work. If as a founder, you don't have the marketing background to do that, then I want you to be upfront and say, our plan is to grow through social media expansion, but we don't have the member of the team onboard to lead that. So one of our core hires is to hire a really skilled, you know, market, you know, CMO, or add people for free on your advisory board who are really experienced marketers, you know, shoot your shot, message someone really fancy in marketing and just be like, hey, I have a startup, can you give me 30 minutes of advice? Do that with them 3 or 4 times if they're willing to keep doing it and then ask them to join your advisory board. And build the expertise around you. It's not about you having to know how to do everything, but it's about you needing to know, okay, I don't know this, let me bring in somebody smart who does.

And this is a perfect— and I'll make this the last question because I know we're going a little over here. So Victoria was asking, and it's, you know, your view about boards of directors and advisory boards. So I think you went a little bit into the board of directors side in the presentation where I think you were you know, kind of looking at it at a macro level where it was more about, okay, is this founder— do they understand that they don't know everything? Are they creating a governance structure that isn't just about maintaining the power but is about building something, you know, valuable for everybody, right? Yeah, if you can expound about that a little bit, and then also advisory boards, which is a little bit different and definitely a lot more applicable applicable to angels, you know, how much, how much weight do you put into those, um, you know, whether on the, on the positive or the negative side?

Yeah, so I, I think it is really important to note the difference between an advisory board and a board of directors, because the board of directors, if you think about the control of a company, the shareholders essentially vote on the board of directors, and then that's kind of it. All the rest of the control of the business, the decisions being made, are run by the board of directors. And Typically, every board member has one vote. So you've got 3 people, they're controlling the business. Even, you know, if you have 75% ownership of the shares, it's the board that's controlling it. So having the right people on your board to actually run the company makes a lot of sense. Typically, in the early stages, right, you're just gonna have the founder or the co-founders be on the board. You're not gonna have a ton of people. When you, have your first serious raise, you're probably gonna have the lead of that raise take a board seat. But until you're much later stage, everyone on the board should be one of the investors. Early stage in a company, you're not paying external board members to sit on your board. External board members are expensive. These are $100,000+ a year jobs to meet 4 times a year and give advice. And so you're not typically, you know, paying external people to be on your board, you also wanna make sure you always have an odd number of people on your board. 3, 5, you don't want even numbers 'cause then you can have, you know, a 50/50 split. Exactly. And then my last point that I would add is as an early stage company, you typically don't want more than 3 board members. You want your board to be able to get together quickly, easily, make fast decisions. You don't need 5, 7 people. Early on in the business. As you got going through, you know, Series A, B, that's when you expand to 5, something like that. And that's when you can start thinking about paying one external board member. So you've got 2 founders, lead of the Series A, lead of the Series B, and then an external. That's 5. For the advisory board, totally different. The advisory board is the people you ask for advice. This is what you grow and expand, really top-line amazing people in their fields to help bolster areas of weakness that you have. And the value you can get from an advisory board is entirely driven by you as the founder. So as an investor, I like to see, okay, does the advisory board meet every quarter? Are they actually engaged? Is there an agenda that's set? Do they take notes? Like, is this actually something where the advisors are coming and bringing value? Or are, you know, do the advisors never kind of meet and they're just sort of names? Some advisors, maybe you just want to have the name there because it looks fancy, But others, you wanna make sure people are active and engaging in the business. And as a founder, you can use your advisors more than just during advisory board meetings. For example, on the Equivesto Advisory Board, I have a number of members who can never make our quarterly meetings, but I'm meeting with them separately once or twice a month, leveraging that advice. And so you wanna take advantage of the fact that you can have a broader advisory board. You can pay these people essentially in long-term stock options, so you don't pay them any money up front, and they're helping you because they like helping companies. It can, and it can really grow your business. And so that's great, um, and that can really bolster potential areas of weakness on your team.

Awesome. All right, thank you so much, Alex. And praise is pouring in here, Alex. Sabina is saying, great webinar, so many things I need to learn for my upskilling Camille says, I share the same experience. So thank you so much, Alex. This really was super in-depth. I learned a lot today, and I'm sure a lot of people in the crowd did as well. Just a reminder, we will be sending out all of this information over the next couple of days. Any notes about— is Equivesto looking for anybody or anything?

No, we have a ton of learning materials on our website. Most of them are geared towards Canadian investors Canadian startups, but everyone's welcome to, to make use of them. We also have an Equivesto community, community.equivesto, that has free courses for startups, for angels, if you want to sort of get more education in the space. I feel like all of my time these days is spent on educational activities, and I stopped running the company a long time ago. But, uh, um, definitely we're happy to support the startup ecosystem and community around the world. Thank you all very much for spending some time and listening to me drone on about due diligence. And I look forward to seeing you all again soon.

That was great. Thank you so much again, Alex, and thanks everybody for joining. We'll be in touch soon. All right, have a good one.