Welcome to the Innovator

Welcome to The Innovator, the monthly newsletter for iiM, LLC. What is iiM? We are a funding platform for early-stage companies in the animal health, agriculture and human health verticals. In this newsletter, we intend to share educational information, ideas and a perspective on the investments we are making. If you do not want to receive this publication, please let us know and we’ll remove you from the list of recipients. Please enjoy this issue of The Innovator.

 

-Lydia Kinkade, iiM Managing Director

The Due Diligence Process

Every funding entity, whether it be venture capitalists, angel investors, or family offices has a team of individuals who are responsible for digging through a potential early-stage company’s business plan with a fine-tooth comb. This includes examining items such as financial statements, intellectual property documentation, capitalization tables, term sheets, third-party agreements, founder’s documents, market analysis, valuations, and other pertinent information. The investment candidate usually has a data room available that it shares with the investment group including these things and more.

 

For iiM, our due diligence process is thorough, rigorous, and intensive, ensuring only the best companies get presented to our investor group for consideration. After a company’s presentation to iiM’s group of investors at one of our investor meetings, our group decides whether there is enough interest to move forward with a full-fledged due diligence report. If so, we send our Due Diligence Checklist to the CEO of the company, which lists all the documents iiM looks for. The company will add these documents to the shared data room, and the due diligence process starts. Our team follows the same format that one would find in a business plan, starting with a company overview followed by heavy scrutinization of the problem the company is trying to solve and how their product(s) is/are the solution.

The next most investigated topic is the market analysis. Companies should be conservative in their projections since our team does a deep dive in peer-reviewed literature and other data sources to confirm the numbers presented are indeed accurate and reliable. Other important aspects our team looks at is the ownership of intellectual property as well as the previous capital funding terms/capitalization table and financials. These are important aspects for iiM, as it shows a track record of how past fundings were handled, how investments were valued historically, and how fiscally responsible the company is with investor funds.

 

Lastly, the due diligence report is concluded with pilot studies, beta testing, and customer interviews (if applicable). This gives our team a real-life pulse on the company’s solution and more information on how potential customers judge the product(s). Though this is a long process, it ensures both iiM and the early-state company are the best fit for one another, and that future relationships are streamlined and transparent. Once this information is compiled, it is documented in a 30-40 page due diligence report and sent to the investors so that they may make the most informed investment decisions.

 

-Amanda Curtis Burkhardt, iiM Consulting Director

Venture Investing Terminology

There are many terms in the venture capital world that can be confusing. As we look at various companies and meet with their founders, you may hear us use some of this terminology. Here are a few such terms and what they mean.

 

CAC– startup companies typically utilize multiple rounds of funding to achieve scale. These various rounds are often referred to as “series level” funding. A “Seed” stage round is usually the first tranche followed by a Series A round, Series B, Series C and so on. With each round of funding comes dilution for the founders who are giving up a portion of their ownership with each new investment. Likewise, investors in each preceding round are also subject to a level of dilution. iiM invests at the Seed stage as well as at Series A and less frequently, at Series B.

  

CLTV – Customer Life-Time Value (CLV or often CLTV), or Life-Time Value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. This term is related to the CAC. At iiM, we are interested in understanding not only how much it costs for a company to acquire a customer, but what the Lifetime Value of that customer is expected to be.

 

Tag Along Rights – A minority-shareholder protection affording the right to include their shares in any sale of control and at the offered price.

 

Post-Money Valuation – The valuation of a company immediately after the most recent round of financing. This value is calculated by multiplying the company's total number of shares by the share price of the latest financing.

A Look at a Portfolio Company

We are pleased to currently have nine companies in the iiM portfolio with due diligence underway for additional investments. One of our portfolio companies is AgriSync, Inc.

 

AgriSync makes cloud-based software for mobile field support in agriculture. Sold to ag service advisors and input vendors such as seed, chemical and machinery providers (“advisors”), AgriSync™ allows advisors to reach their farmer-customers with mobile-first, video-first support on any device. Farming is better with AgriSync: farmers connect with all their advisors through a single interface, saving time while getting the most out of their ag tech investments; advisors deliver higher quality, more responsive support at lower cost.

 

AgriSync enables farmers and advisors to hold see-what-I-see, field level support discussions. AgriSync utilizes the best mobile video chat technology, the ability for farmers to connect with advisors from multiple companies in a single, simple interface, and robust enterprise-level customer support features for advisors to better track and measure their success. Most users access AgriSync through their mobile application, and the system is built and run entirely in the cloud. As a subscription system, there is no software to buy or maintain.

 

The company was founded in 2014 and has its corporate office in Waukee, IA. iiM made an early-round investment in AgriSync, and also made a follow-on investment.

http://www.agrisync.com