Put everything under the microscope!

There is some background research you should do prior going past first round interviews and definitely before accepting — this may not at all be obvious but it may help you avoid taking a role that turns out to not be right for you.

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Independent Research

1. Check the Linkedin of every senior team member and google their names with “scam”, “scandal” etc in that search. If they claim professional qualifications ie lawyers, brokers — check those sites (can be found by a google search eg “NY attorney bar look up”)
2. Do a company search in the jurisdiction of incorporation — state of incorporation is often in the privacy terms on the website — if not start with Delaware https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx and then check the state where the company is headquartered. In some states there’s not a lot to find, in other states you can pull a good standing certificate pretty quickly and easily. Likewise international companies vary in disclosure requirements — https://www.gov.uk/government/publications/overseas-registries/overseas-registries
3. Dig into the company website — many young companies will only have press releases, but if it’s a public company or in the process of IPOing then a flick through several years financial results would be wise. You can also search for these in the US on https://www.sec.gov/edgar/searchedgar/companysearch.html
4. Get a Crunchbase pro account — look at the funds raised, dig into who the investors are and google the investors with the same details above — and also check for Form Ds (reports of Regulation D private fund raises) under the company name on https://www.sec.gov/edgar/searchedgar/companysearch.html — crunchbase should match the Form D total but if it doesn’t there’s potentially a problem
5. If you can, check details of legal advisors, auditors etc
6. Check to see if the company has patents — this is the US search http://patft.uspto.gov/netahtml/PTO/search-bool.html — and the EU/Global search https://worldwide.espacenet.com/ — if the company has patents, something obscure but sometimes useful is to check to see whether all of the inventors are still with the company — particularly if the company is stealth or very dependent on its technological pre-eminence. One or two inventors leaving is something that happens — if all of the inventors other than the founder have left the company there’s potentially something problematic.
7. Run names through the OFAC list — senior management, investors, major customers and partners https://sanctionssearch.ofac.treas.gov/ — and then if they are international check the sanctions list of that country if there is one — eg https://sanctionssearch.ofsi.hmtreasury.gov.uk/ — https://www.mas.gov.sg/regulation/anti-money-laundering/targeted-financial-sanctions/lists-of-designated-individuals-and-entities
8. If any of the above is off, then it’s worth running a litigation search — the US portal is PACER — there are similar searches you can run in other countries.

Questions to ask the Company

1. If you’re going in as senior leadership — you will want to at least ask to see:
2. Most recent financials, ideally 3 years back, ideally if not audited then prepared by an external accountant
3. Most recent financials, ideally 3 years back, ideally if not audited then prepared by an external accountant
4. Current business plan, including KPIs and anticipated revenue
5. Current burn rate and run way
6. Current bank balance
7. Plans and timing for next funding cycle
8. In particular if you will be managing a budget, you need to understand the consequences of particular revenue or funding falling off, in particular when that will impact your budget and team.
9. You will want your size of your team and your budget in your offer letter ideally, or at least some written form.
10. Generally let competencies and learning opportunities drive your title discussion, but do make sure title, equity, salary and bonus are all written in your offer letter.

Questions about D&O Insurance

1. Directors & Officers (D&O) insurance provides funds when a company which is not at fault is sued or investigated. In particular it provides funds for attorney coverage. Policies differ and some may have a cut off and or a cap — and the insurer will have views on what law firms, but essentially it shifts the risk of litigation or investigation off balance sheet.
2. D&O can be defined as broadly as covering employees and contractors — but by the flip side there is case law on who is an officer or a director. So the broad rule of thumb is — if you’re going to have a “head of”, officer or director title, asking about D&O insurance is a pre acceptance piece of diligence rather than a post, how’s our compliance set up piece of diligence.
3. The key question is who has Part A coverage — those are individuals who have coverage as individuals not just as part of the company.
4. The cost is generally speaking quite high, and many digital asset companies take the view “well we comply so we don’t need it” — which isn’t really what you want to be hearing if you are going to be on the line.
5. Also bear in mind — the coverage is generally for a year — if an investigation pops up, after you have left, and the firm doesn’t have funds for lawyers anymore and no D&O that is going to be a difficult situation.