Many angel groups across the country use a single document to share diligence information. We do not within the Alliance, but it is regarded as a best management practice when dealing with groups you do not hold close in terms of communication, values, and confidence.The Angel Capital Association (ACA) is the national organization of accredited angel investors. The association provides access to trending ideas, professional knowledge to help angels improve returns, and promote effective public policies for angels and startups. ACA is not a funding source, but rather a forum for interaction for angels across the country and a political voice supporting the needs of the angel community. The ACA has created a loosely organized syndicate of angel groups for which they have created a generic agreement to be executed between parties when they collaborate and perform diligence. We call it the Treaty.

The agreement essentially states that diligence is at your own risk and absolves the sharing party of responsibility. I have never seen a group sue another for sharing diligence, but ACA does believe it is a best management practice to memorialize the fact that diligence is never perfect.

We only share diligence with closely held partners. We heavily qualify all diligence reports with the following disclaimer:

“This document is not, and should not be construed as, an offering of securities. Further, this document contains forward-looking statements based on management’s current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company’s strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like “expects,” “anticipates,” “plans,” “intends,” “projects,” “indicates,” and similar expressions. These statements are not guarantees of future performances and involve a number of risks, uncertainties and assumptions. These risks and uncertainties include, without limitation, risks associated with changes in the laws, regulations, policies, economic conditions; the inherent uncertainty of technology research, product development, product testing, product commercialization, and the impact of competitive products; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; and successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances.

Potential investors should always carry out their own due diligence into investment opportunities. Angel Capital Group and its affiliates and its associates are not registered investment advisors, brokers, or dealers. Readers of this report are advised that the material contained herein should be used solely for informational purposes and it does not purport to recommend, tell, or suggest any investment, to either buy or sell, whatsoever in any public or private securities.

Readers should always conduct their own research and due diligence and obtain professional advice prior to making any investment decision. Angel Capital Group, its affiliates, associates, and its management will not be liable for any loss or damages caused by a reader’s reliance on information obtained in any of our reports, special reports, email correspondence, or copy on our websites. Readers are solely responsible for their own investment decisions.

The opinions and analyses in the report are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied is made as to their accuracy or completeness. All information contained in this report or on our websites should be independently verified with the companies mentioned. The editor and publisher are not responsible for errors or omissions. If you do not agree with these legal terms and conditions, then do not continue to read this document. Proceeding to read this material is an explicit acceptance of these terms.

Reliance upon material contained in this report shall be at your own risk.”

The Treaty essentially holds harmless both parties understand information in shared “as is.” There are no warranties expressed or implied and each party should use such information at its own risk and conduct its own diligence. In short, each party is making an independent decision and can’t blame the other party for incomplete or even erroneous information surfaced in the process of diligence. Despite this language, if there are disputes, the parties agree to binding arbitration.

As you move about your region and the nation interacting with other angel groups, you will almost certainly encounter this document (attached). You should not have any problem signing the “treaty.” It is certainly advisable to use it if you are syndicating with a group you do not know well and they request your diligence.

For more information:

This is published under the Appalachian Regional Commission POWER Grant, PW-1835-M.

Copyright Appalachian Investors Alliance, Inc. 2018
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