Occasionally, when working with an Agent, or even in some cases with a principal, the matter of proper due dilligence becomes of issue.  I am a big fan of due dilligence, in fact I love it.  Why?  Very simply because it saves time, it saves money, and it prevents exposure to risks both on the part of ourselves and our clients. As a result we have a very clear set of documentation protocol we follow when working on putting together a deal.  As a result when looking at a financing opportunity we will always require the following:


  1. A completed legible application or KYC, with a signature. The person or corporate entity on the application, must be the control person in charge of the securities.  If it is a corporate entity on the app, then the signature must be that of the CEO or CFO, no exceptions.
  2. A copy of an account statement from the institution housing the shares.  This provides us with the knowledge of where the shares are housed and proof that the shares are electronic. We also make sure the name on the statement correlates with the name or entity on the app.
  3. In some cases we may ask for a passport, if the names/positions are not easily verifiable via the public record.
Now as said previously there are times when this has been an issue.  The agent or principal tells us they will get the docs in as soon as we provide a term sheet, or they principal feels it is our duty or obligation to provide them with information without having shared any with us first.  Now the question for some might be, why is this such a big deal?  Why not just be agreeable and provide the termsheet?  The answer is twofold.
First, and this is the simplest to explain is that the majority of the time, it is a waste of time to put out a term sheet without having the docs in first.  Nine out of ten times, the deal goes nowhere.  This can be for many reasons usually agent related, but the bottom line is that it is a time-waster, and the numbers prove it.
Second, and lastly, because of the types of products and services we offer to our client, looking at a deal is not a 10 minute task.  In many cases it it can be hours or even days to appropriately assess an opportunity.  Often, several people around the world may be included in this process of determining a course of action, and their time is just as valuable as yours or mine.  We don’t set wheels in motion unless we have all relevant information in house.
Ok, so now we know why having a due dilligence package is required, let’s talk about the benefits of having a correctly put together set of due diligence docs..  here are just a few:
  • We know with certainty who the borrower is.
  • We know with certainty the borrower is genuinely looking for funding.
  • We know with certainty the borrower is willing to have it known he is looking for financing, and not sitting in the background.
  • We know with certainty the borrower is aware of Saris Capital.
  • We know we are not working with a rogue agent who is shopping terms sheets around to sell deals.
  • We know with certainty how much the borrower is looking for and the intended use of proceeds.
  • We know with certainty the stock symbol the exact number of shares.
  • We know with certainty where the shares are held, and have proof that they are in electronic form.
  • We have a signature letting us know all of the above is true, that the borrower has approved of us looking at the deal, and that he is interested in a quote.
Now, thats some handy information to have, certainly more so given the size and nature of these transactions. I hope for some this clears a few things up and for others it provides a sense of what Saris is about as a firm.  As stated on our about us page, our goal always is to do things the right way, the first time, and every time!
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