Review your Plan and Assessing the Opportunity
We are most drawn to business plans that clearly present innovative ideas managed by a seasoned team of industry veterans. We seek companies at the inflection point of their development as outlined in our Investment Strategy. Regardless of our ultimate investment decision, we enjoy the opportunity to work with entrepreneurs and will provide efficient and timely responses in a constructive, straightforward manner.

Meeting your Management Team
We like to meet in person with the management team of companies that pass our initial filters. Management must have the appropriate skills to manage the company at its current stage of development and possess deep experience in its given industry. We are more likely to consider companies led by people whose reputations are familiar to us, or those who can provide excellent references. We will ask for a presentation of your business opportunity, including, management team backgrounds, business model, technology review, financial projections, sales pipeline and projected use of funds.

General Due Diligence
If we continue to pursue the investment and move into the due diligence phase, we engage the full Zon Capital team in evaluating the opportunity and becoming familiar with the company, its key people and strategic partners. In addition to relying on the experience of the Zon Team, and our Advisory Board, we have developed numerous relationships with many industry experts that we call upon to assist us in the due diligence process as necessary and for candid evaluations.

Zon Capital will do extensive reference checks in order to obtain a better sense of the entrepreneur's past experience. As a matter of diligence, we make a point to obtain references outside of the list provided by management. We also call a number of customers to get first-hand responses to the company's products and services. We expect potential investments to have quality customers who express strong confidence in the products and services offered.

In evaluating a potential investment, we need to be confident that the product is complete, and that the product does what it is purported to do. We perform detailed research into the company's market, technologies, and competitors. To evaluate the company's technology, Zon does not rely solely on in-house expertise, but may engage appropriate specialists to assist in the technology evaluation.

Evaluating the Risks and Exit Strategy
The Zon Capital team evaluates the overall business model, the product set, the appropriateness of the management team, the size of the market, the competitive landscape and the exit potential of the investment to develop a risk profile. If the investment fits our target investment criteria, fits into our current portfolio and we are enthusiastic about its potential, we will move to an investment decision.

Investment Decision
The Zon Capital investment committee is comprised of the three managing partners of the fund plus Ron Hahn, a thirty-plus year investment professional and member of Zon’s Advisory Board, a unanimous vote is required to make the final decision to invest. Valuation, board seats, requirements for additional investment, vesting schedules, and other terms are negotiated and agreed to by the parties. We will involve other reputable venture capital firms in the round of financing. We will generally require that financing be syndicated with at least one other reputable venture capital firm.

Working with our Portfolio
With each new investment we use a tool that is a standard methodology of the fund - the 120-day plan. This strategic plan must be owned by the portfolio company’s management team, but is developed collaboratively with Zon. The plan is a template of important, measurable key activities and objectives used as a road map for the period just after investment. The Zon team views the first 120 days after a company’s first institutional round of funding as critical to its success. The 120-day plan is a roadmap to assure that each portfolio company is appropriately focused and has well-thought-out capital and execution plans. This process, beginning immediately after funding, provides coordination of the critical elements that lead to the creation of a successful, growing business. The 120-Day Plan is an important foundation that will evolve into the long-term planning tool used by the company to build, grow and execute against its business plan.

No Surprises
In addition, the fund uses an oversight tool called the Zon Dashboard to monitor the real-time progress of portfolio companies beyond the 120-day period. The Dashboard keeps the managing partners, the senior managers of the portfolio company and the board members synchronized on the key growth initiatives for each company. The Dashboard tracks goals and objectives for each portfolio company and serves as a central directory for maintaining key information about each portfolio company, including: capitalization tables (current and historical), all rounds of funding, financials, board representatives, key committees of the board (such as the compensation, executive and audit committees), bank relationships, lines of credit, auditors, and attorneys.

Partnership
We will be active board members for virtually all of our portfolio companies. The managing partners have served previously on over 15 portfolio company boards of directors and on such board committees as audit, executive and compensation. Beyond the 120-day plan and board representation, Zon’s involvement will be focused on such tasks as advice on key operating decisions, interviewing key management and board additions and providing introductions to reference accounts and strategic partners. The managing partners have extensive experience in facilitating corporate partnering deals for portfolio companies and that will continue to be an important part of the added value that Zon delivers to its portfolio. Zon will reserve capital for follow-on rounds of financing and will tap its extensive network to complete such rounds. And finally, the Zon team has direct, relevant experience in pursuing exit strategies for companies, including trade sales and IPOs.

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