Once you think you’ve mastered a process, there’s nothing like a global pandemic to add a new twist. As I reflect back on the past eight months, it’s hard to believe that at the end of February, the Accion Venture Lab team was hosting our first LP Annual Meeting and sharing insights from our portfolio and the exciting new trends in the fintech for financial inclusion space that we were interested in exploring. Days later, our team returned to our respective countries and cities and faced lockdown and quarantine measures.

Like most investors, during the first few weeks of the global shutdown, we first focused on our own portfolio to ensure that they were well-supported, capitalized, and able to incorporate new practices to build resilience internally and to support their clients during this unusual time. By June, we felt comfortable enough to dip our toes back into the active deal execution space, but that brought up a number of questions. How exactly do we execute deals remotely? How do we build relationships and trust with entrepreneurs that we haven’t met in-person yet? Are we ready to explore new markets where we don’t have portfolio companies?

Up until COVID-19 struck, we prided ourselves in our ability and willingness to go on the ground, conduct in-person due diligence, meet with clients and partners, and make decisions quickly. Co-investors and later-stage investors would often look to our thorough due diligence process and subsequent investment as a vote of confidence for an early-stage venture. Now, in this new era, we were forced to make a tough decision: halt investment activities or reinvent our investment process. Like our portfolio companies, we decided to be nimble and restructure our approach to meet companies where they were (even if that was their living room) through a virtual process. During the pandemic, we’ve completed three remote diligence processes, in Africa, Asia, and Latin America, resulting in deals that will be announced soon! We became more efficient with each deal, and now we’re sharing what we’ve learned along the way with entrepreneurs and investors who are involved in remote diligence processes.

We identified four key areas where we needed to enhance our due diligence process while working remotely:

1. Getting a deeper understanding of the context in which companies operate

2. Leveraging technology to have the interactions we would typically do in person

3. Involving the broader Accion Venture Lab team in reviewing company product design and delivery

4. Collaborating closely with fellow investors and other partners

Even once in-person interactions are possible again, we would like to keep some of these enhancements in our permanent due diligence processes going forward. We’ll continue to involve the full Accion Venture Lab team earlier in the assessment process — our full team loved hearing from the entrepreneurs directly.

We’ve also noticed that the shift to remote due diligence has been a difficult transition for entrepreneurs. Many have worked with investors in the past but managing multiple due diligence processes remotely became challenging over time. After reviewing our own processes, we put together this guide to help founders navigate the remote diligence process more smoothly.

Our team has been heartened to see how inclusive fintech companies around the world have risen to this challenge with creativity and resilience. As investors, we should follow their lead and update our investment processes so that we can keep capital flowing to businesses that need it now more than ever. We emerged from this process having refined the virtual diligence process and improved our team’s efficiency. With patience, flexibility, transparency, and organization, I think both investors and entrepreneurs will be more resilient post-COVID-19.

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