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Harbright’s Team Approach to Early Stage Investing

Take-Aways

  • Members/investors optionally participate in Deal Flow:  Harbright takes a team approach to investing that leverages input from our members who can optionally participate in the deal flow funnel: sourcing, vetting, and advising portfolio companies.
  • Professional diversity increases expertise: Harbright’s investors are professionally diverse and that diversity is an asset we leverage in each phase of the funnel:
    • Sourcing: Our members are leaders in many different industries who introduce us to new opportunities
    • Vetting and Advising: Our members represent many different functional areas of business (marketing, finance, etc.) and can provide expert level guidance: (a) Internally, in our due diligence process -and- (b) Externally, to our portfolio companies
  • Improved outcomes: Harbright’s team approach and professional diversity lead to better investment outcomes

Background:

From the time we were founded in 2014, Harbright has worked together with our investors.

We believe that a team-based culture, with input from our seasoned investor pool leads to better investment outcomes. While investment in Harbright can be passive, we encourage our investor base to participate in the sourcing, vetting and advising of portfolio companies. Guidance from investors at each stage of the deal flow funnel has proven to be highly beneficial. Our members have sourced some of our best performing portfolio opportunities and provided due diligence recommendations that lead to our best go, no-go investment decisions. Nearly all Harbright investors are leaders in their respective organizations and their experiences allow them to provide meaningful direction to portfolio companies.

Harbright’s members are also professionally diverse; representing multiple industries and functional areas of business. Harbright’s broad investor base supports our sector agnostic investment approach and allows us to evaluate opportunities across a wide spectrum of industry verticals. Harbright’s members are also leaders across key functional areas of business (finance, marketing, executive leadership, etc.), allowing us to answer critical due diligence and other questions with input from our internal experts.

Harbright’s team approach, that leverages our deep bench of professionals, leads to better investment opportunities, investment decisions, and investee guidance; which together, lead to better outcomes.

I. Investor Participation: Sourcing, Vetting, Advising

a) Deal Sourcing

Harbright’s members are highly successful professionals (attorneys, physicians, entrepreneurs, engineers, executive leaders, etc.) and often have an entrepreneurial outlook on business. As such, our members frequently encounter promising new companies that can positively disrupt existing industries and act as growth engines in their respective communities. Some of our very best portfolio companies were sourced directly by members. When a Harbright member says, “I have something you should take a look at,” we are eager to listen. We encourage our members to bring new opportunities to the table.

Deal sourcing is enhanced by our members’ industry specific knowledge. Our investors with backgrounds in industrial tech, bring us pre-vetted, high quality, industrial tech deals. Our med-tech practitioners bring us pre-vetted, high quality, med-tech deals, and so on. Given Harbright’s sector agnostic approach to early stage investing, and desire for high quality opportunities, we value and seek these recommendations.

b) Vetting

Harbright’s partners perform due diligence on all opportunities brought in for review, but we often ask our investors for feedback in areas where they have expertise. For example: In med-tech deals, we’ll ask our med-tech engineers and physician members to weigh in on clinical outcomes vs. the standard of care, the regulatory pathway, and how users might react to the target product profile. In Software as a Service (SAAS) deals, we’ll ask our IT industry members to evaluate the competitive landscape, application interoperability, and the barriers to adoption. In all cases, we seek to leverage our members’ skills and experiences to help make better investment decisions. While participating in due diligence is not obligatory, our members often enjoy exercising their analytical muscles in the vetting process. Because there are many different kinds of questions and challenges (IT, Finance, Regulatory, Intellectual Property, Marketing, Sales, Executive Leadership, etc.) presented in the due diligence process, we highly value and seek members from different functional areas of business.

c) Advising

Many of our members have reached a stage in their careers where they’re ready to share their time and wisdom with fellow entrepreneurs and executives. Harbright offers multiple avenues for direct engagement with portfolio companies. Members may be asked to represent Harbright on a portfolio company’s Board of Directors, an advisory board, as informal advisors, or as paid consultants. Members often build relationships with principals in the due diligence process that continue well beyond the deployment of capital. Advisory opportunities allow Harbright members to take on the challenge of learning about a new business and provide meaningful guidance to principals. Harbright’s breadth of investors, derived from broad industry backgrounds, high levels of professional attainment, and diverse functional area skills, allow the team to provide meaningful advice across a wide range of opportunities and challenges

II. Closing

Harbright’s members are highly successful professionals (attorneys, physicians, entrepreneurs, engineers, executive leaders, etc.) and often have an entrepreneurial outlook on business. As such, our members frequently encounter promising new companies that can positively disrupt existing industries and act as growth engines in their respective communities. Some of our very best portfolio companies were sourced directly by members. When a Harbright member says, “I have something you should take a look at,” we are eager to listen. We encourage our members to bring new opportunities to the table. Deal sourcing is enhanced by our members’ industry specific knowledge. Our investors with backgrounds in industrial tech, bring us pre-vetted, high quality, industrial tech deals. Our med-tech practitioners bring us pre-vetted, high quality, med-tech deals, and so on. Given Harbright’s sector agnostic approach to early stage investing, and desire for high quality opportunities, we value and seek these recommendations.
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