KYC (Know Your Customer)
"Know Your Customer" (KYC) is a foundational due diligence process that verifies the identity of potential investors before any funds are exchanged.
Originally rooted in banking regulations to combat money laundering and fraud, KYC has been universally adopted in the financial sector, including venture capital.
The process often involves a comprehensive review of various documents like identity proof, address verification, and even a background check in some cases.
Failing to perform thorough KYC can expose firms to considerable risks, such as reputational damage or financial penalties for violating regulations.
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