It’s time for a new Deal Room
“Deal rooms” are a mainstay of social enterprise conferences (and investment/entrepreneurship conferences in general), but they are overdue for a rethink. Too often, deal rooms do not result in actual deals, and deal rooms don’t work as well for entrepreneurs as they should. They perpetuate a power imbalance between investors and entrepreneurs, setting up entrepreneurs to be judged and criticized by investors, rather than encouraging the kind of back-and-forth dialogue that supports relationship building and decision-making. Additionally, because the status quo allows investors to take a disproportionately long time to make decisions, entrepreneurs are often left hanging, unable to aggressively grow their business while they wait for the “powers that be” to decide whether or not to invest.
A Different Approach
ADAP wants to reimagine the deal room. That’s why we are hosting The Real Deal: ADAP Deal Room @SOCAP, in conjunction with launching ADAP Fund 2, our second early-stage impact fund. We want to create a space for entrepreneurs to discuss their businesses in a less stressful and more balanced environment, and we want that to result in us all GETTING STUFF DONE. With the right kind of pre-work, we want to be able to develop partnerships and close deals during the week of SOCAP, so that entrepreneurs walk away from the conference with investment capital, not just a stack of business cards to follow up on. We’ll use ADAP’s Four Hour Due Diligence process (to be unpacked in our next blog post), which makes efficient use of the entrepreneur's time, while ensuring that we dive deeply enough to thoroughly vet the entrepreneurs and their business models. We hope to create a culture of collaboration in the deal room that will allow for honest, direct and empowering conversation to find win-win partnerships.
Additionally, ADAP considers that the major focus of its time and energy needs to be spent working intensively with entrepreneurs post-investment. By working collaboratively with entrepreneurs, ADAP can add value and thereby mitigate some of the investment risk associated with early-stage social enterprises. ADAP partners with entrepreneurs as they develop the critical four cornerstones - values, impact, revenue, and growth - that any social enterprise needs to be successful.
We are delighted to be collaborating with Kyle Westaway, who has generously offered to provide free legal support for one year to companies selected for investment after the deal room. We will publicly announce the companies we are partnering with from the stage of SOCAP on Friday October 13th. If you are an early-stage social entrepreneur, please go to our website to learn more about our investing approach and provide information (via the contact form on our website) no later than September 19th. If you’re an impact investor, please join us on October 10th; if you’re just curious about the approach and have insights that we can learn from, we welcome your contribution as we develop a different approach to deal rooms.