Product Regulatory – the Critical Missing Piece of the Venture Capital Process

Cary, NC, October 10, 2009 --(PR.com)-- Over the last two decades, CertifiGroup has been assisting designers and manufacturers with “UL” certifications and “CE Marking” projects. If a designer has the correct product Standard in the beginning, and either has the specialized product safety knowledge or works with some one who does, then they may be prepared to correctly present their business and products for investments.

Unfortunately, many times product regulatory is an afterthought, and this missing piece is not identified until too late, when promises have been made and schedules and budgets have been set.

In the Venture Presentation step for securing VC, the prospect will want to be able to talk about regulatory aspects of their product, and be able to claim certification or preparation for certification. They will be able to make statements like “Our product is already UL certified” or “We are working with a product safety testing lab to insure there will be no delays due to regulatory failure or re-design and re-tooling”. This will do two things: It will suggest they have a well thought out and inclusive approach and; the Venture Capital firm can use this as information for judging other competitors compared to the prospect – whoever has the knowledge and preparation will come out ahead and not end up missing milestones.

For the Due Diligence Assessment steps, this missing piece can affect market positioning, execution capabilities, attainability of projections and cash flow forecast. An informed manufacturer will already know about their competitor’s products, and whether or not they have successfully completed product testing and certification. Without this important information, the potential competitor will already have a great advantage. The Venture Capital firm will be asking several questions: Does the track record of the management team show their identification and resolution of these market roadblocks?; Will they have to ability to deliver the product on time and at the agreed price?; Do they understand the competitive advantage of a third party safety certified product and how this can affect marketing and distribution plans?; How does the lack of product certification impact possible legal consequences?

Will the entire investment be at stake? What are the next steps?
· “Compliance Checkup”. Get the designer to meet with a product safety expert, even if only for a preliminary “fact finding” project. These are relatively inexpensive and easy to schedule and prepare for.
· Product Safety Budget. Make sure there a budget for product safety certification, including estimated costs for re-design and (In some cases) re-tooling.
· Product Safety Milestones. Know the time it will take to manage the regulatory process, including the difference between being technically prepared or unprepared.
· Venture Capital Due Diligence. Let a product safety expert assist to safeguard the investment money.

Contact Certifigroup for more information. A limited number of designers and manufacturers will be eligible for no-cost engineering time at the Cary NC facility. 800-422-1651, CertifiGroup.com.

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