For advisors
Portfolio company wind-down for VCs
You are looking at one or more portfolio companies that are winding down. Your job is to introduce the company that still exists and then leave the signature to its directors. A board seat does not put the fund on the agreement. Each company gets its own enquiry. The company's lawyer should see an exclusive license in the company's own documents.
Up to $150K · $0 cost · 3 days
| Fact | Detail |
|---|---|
| One company | One company per enquiry. A dozen wind-downs are a dozen enquiries, not a batch upload of the fund's companies. |
| A board seat | The portfolio company signs. A board seat is not a signature, and the fund is not the licensor. |
| The fund's files | The fund's own email and files are not the records being licensed. The firm's archive stays out of the enquiry. |
| Later documents | Exclusivity sits in the portfolio company's documents. The company's lawyer should see it before a later buyer does. |
| Introduction | There is no referral fee. A VC introduction is not a sourcing fee and not a carry. |
What investors are deciding
A venture fund is looking at one or more companies that are winding down. Your job is to see whether the company's own records are worth a question, and to get out of the way of the people who can sign. The fund does not sign. A board seat is not a signature. You do not upload the fund's files, and you do not put several companies on one form. Each company that still exists gets its own enquiry, its own directors, and its own fit decision.
Your role as an investor, and who signs
Introduce the company. Name the entity and the directors. Ask whether the tools are still on. Send the company's lawyer the point that a license would be exclusive, so it shows up in the company's documents. An introduction does not earn a sourcing fee, a carry, or a referral. The fund's own email is not the portfolio company's history, so leave it out. Client data at the company still has to be cleared by the company. If the company is already dissolved, the company's lawyer says whether anyone can still sign.
The company signs an NDA and the licensing agreement directly with the data partner, not with Vetrix. We tell the company the data partner's name before anyone signs.
What to tell a client
Can the fund sign?
No. The portfolio company signs. The fund is not the licensor, even if you sit on the board.
Can we include our partner emails?
No. The fund's own archive is not the product. The company's operational records are the question.
Is there a fee for the introduction?
No. There is no referral fee, no sourcing fee, and no carry for making the introduction.
For the records timing in a company that is closing, read what to do with company data when closing a business. The fund does not sign the company's agreement.
Checklist
| Check |
|---|
| Name the entity that still exists. |
| Name the directors who can sign for that entity. |
| Confirm the tools are not yet canceled. |
| Send the company's lawyer the exclusivity point. |
| Submit a separate enquiry for each company. |
When a different role fits
If the company is an operating portfolio company and a later sale is still expected, that question belongs with private equity. It is about an operating company and a future sale. A venture wind-down may never be sold.
For the company's side of this, read what to do with company data when closing a business.
If that is your job instead, read monetizing portfolio company data.
If you are a dissolution lawyer reviewing who can act for the company, read recovering value for clients in a company dissolution.
For the wider job, read how to sell a failed startup. Other roles are under company data licensing for advisors.
Read how company data licensing works for the steps. For the four license terms, read the company data license agreement, in plain English.
Related
- For advisors
Company data licensing for founders, finance leaders, investors, and advisors.
- Selling a company
How to sell a failed startup, and the options when a company cannot be sold as a whole.
- Private equity
Operating portfolio companies. The OpCo signs. The license belongs in exit diligence.
- Closing
What to do with company data while the company is closing, before tools are canceled.
- How it works
The six steps from a short enquiry to payment, and how to stop.
- License terms
The four license terms: what you give, keep, agree, and sign.
Questions about data licensing for investors
Can the fund sign for a portfolio company?
No. The portfolio company signs. A board seat is not a signature, and the fund is not the licensor. Name the entity that still exists and the directors who can sign for it. The fund can make the introduction. It cannot put the fund's name on the agreement in place of the company. If the company has already dissolved, ask the company's lawyer who still has authority.
Can we license the venture firm's own email?
No. The fund's own email and files are not the records being licensed. Do not offer the firm's archive, the partner inboxes, or the fund's internal memos. The product is the portfolio company's operational records, and only if that company has the right to license them. Client data and former-parent data at the company still have to be cleared first.
How do we submit several wind-downs?
One company per enquiry. A dozen wind-downs are a dozen forms, not a spreadsheet upload. Each company has its own systems, its own directors, and its own fit decision. The form takes about three minutes and uploads nothing. You can send the link to each company's management. Do not combine two companies in one submission, even when the same fund owns both.
Is there a sourcing fee for a VC introduction?
No. There is no referral fee. A VC introduction is not a sourcing fee and not a carry. Do not add a success fee to the fund's model, and do not tell the company that a share of the license will come back to the fund through Vetrix. If the company signs, the payment terms are in the company's agreement with the data partner. They are not a fund promote.
Sources
- Vetrix Labs. Vetrix Data Licensing.