Faegre Drinker partner Jim Fischer speaks on “COVID-19 Crisis and Funding Opportunities” in a free webinar available on the YouTube channel of Global Corporate Venturing. Jim joins a panel including directors and founders of Silicon Valley Bank (SVB), Centrica Innovations and Impact Venture Capital, and moderated by GCV’s founding editor-in-chief James Mawson.
According to Jim: “It will be interesting to see if there will be a shift of corporate parental oversight over some of the corporate venture capital (CVC) community. How much would the parent want to come back in and be more involved in the investment portfolio, and more involved from the strategic perspective on how it impacts the overall operations of their institution?”
He adds: “Another point that’s going to be interesting is the diligence exercise. For many years, the diligence exercise has been straightforward. But clearly there are going to be some different perspectives on what we now want to look at, considering how this crisis impacted people, how it potentially will impact their valuations, as well as insurance issues that are already coming up. We will see how those issues affect the speed at which transactions get done. From the legal perspective, the focus areas are changing, and there is no question that things have begun to change not only in term-sheet drafting but in actual legal documents.”
Furthermore, Jim says: “Joint ventures are something that we’re starting to see more and more of and have for the last couple of weeks, in terms of people coming together to try to mitigate and spread out risk. We are going to see more syndicates come about: both on the commercial side of CVCs, and from the structure of venture capitalists working directly with CVCs. And what’s important to each side is in some cases very different. So the structuring is not only interesting from the standpoint of how they come together, but in how we draft for what’s important to them, especially in heavily regulated industries such as healthcare. Structuring for not only the financial return and the synergistic return, but also for what’s important from the legal perspective is likely to change throughout the next couple of months as we see how this world has changed.”