Process: A Clear Path

Clear’s investment process seeks to uncover as much relevant information as possible in relation to a company’s market, product, business opportunity and team. Due diligence—opportunity research—helps Clear to assess the risk associated with a given investment. With respect to risk, Clear evaluates two primary categories: stage and business.

• “Stage” risk assessment asks the question “what return is fair for an early-stage investor, as compared to a later-stage investor?” Early-stage ventures (no/low revenue businesses with losses) have a greater risk of failure than do later-stage companies (established revenue, at or approaching profitability).
• Business risk assessment encompasses several elements of analysis: management, market, product/technology, financial/financing, and business model risks. For more on business risk analysis, see the following Clear articles and/or the following Clear presentations

Beyond analysis, Clear wants to know management in a way to ensure no surprises. Too often, a venture investor and entrepreneur only get to really know each another when something goes wrong, by which time both parties are past the point of commitment. It is often said that a good venture capital partnership is like a marriage. As such, Clear wants to make sure that the fund and the company have “dated” enough and know one another sufficiently to make a successful partnership.