The rest of this page is a five-question tree for portfolio operations leads, worked through three Illustrative companies, with the transition events that most often start a preservation clock.
Why the introduction can wait and the archive cannot
The two mistakes are not symmetrical. A partner who waits loses a few weeks. A partner who pushes a licensing conversation into the middle of a hold or a purge can do lasting harm, to the company and to their own standing with it.
| If the partner waits | If the partner pushes |
|---|---|
| The archive stays intact while counsel and the records owner decide | People may export, sort or "tidy" records that should have stayed untouched |
| The CEO hears about licensing once the company can act on it | The 90-day attribution window runs while the company is not free to apply |
| A later conversation starts from a verified copy | A deleted or altered set cannot be introduced at all |
| The relationship owner keeps the CEO's trust | The fund looks as if it put a reward ahead of the company's legal position |
SourceX credits an introduction only when the company files a verified application within 90 days of it, and that window does not stretch. An introduction sent while records are frozen can lapse unused. Whether a second, later introduction counts is settled in SourceX's duplicate review, so a partner cannot count on a second attempt, which is one more reason to wait until the company is free to apply.
Who can pause a deletion, and who can say yes to licensing
Preservation and licensing are decided by different people, and a partner who mixes them up ends up asking the wrong person.
| Person | Can they stop a deletion? | Can they open a licensing conversation? |
|---|---|---|
| System administrator or records owner | Yes, when instructed: pause a purge job, run an export | No |
| Counsel, in-house or outside | Decides whether a hold or retention duty applies, and its scope | No; advises the CEO on rights |
| CEO | Instructs the records owner and counsel | Yes: authorizes the discussion and signs for the company |
| An acquirer's CEO after closing | Yes, for the acquired records | Yes, in place of the former CEO |
| Trustee, receiver or assignee in a formal process | Often, under the process | Possibly, within the rules of the process; here the CEO alone may not be enough |
| The partner | No | No; can only ask the CEO whether a conversation is wanted |
Locate the archive at the level of metadata only: which system or storage holds it, the years it covers, which entity employed the people who created it, and who administers it today. A partner never asks for files, samples or logins to answer those questions.
The preserve-first escalation tree
Ask the five questions in order. The first yes ends the walk and names who acts next; only five no answers in a row lead to an introduction.
| Step | Question | If yes, who acts next | What the partner sends | When licensing can come up |
|---|---|---|---|---|
| 1 | Is any record set under a legal hold, or could a dispute or investigation reasonably be anticipated? | Counsel, through the CEO | One line to the CEO: worth having counsel see this before anything is deleted or moved | After counsel releases the records or clears copies being made |
| 2 | Is a purge, retention-schedule deletion or vendor deletion dated within the next 90 days? | The records owner, on the CEO's instruction | A reminder of the date and the suggestion to verify an export first | Once a verified copy exists or the deletion is cancelled |
| 3 | Is control about to change through a signed sale, a restructuring, an insolvency filing or a wind-down? | Whoever controls next | Nothing about licensing; a note to revisit after the change | When the next controller is known and wants the conversation |
| 4 | Is anyone proposing to edit, filter or drop records so the set looks better before a licensing call? | Stop; counsel if a dispute is anywhere near | A plain no: originals stay as they are | Only on unedited records, after steps 1 to 3 read no |
| 5 | Can the CEO and the records owner engage now, and do the published fit facts hold? | The CEO decides | An ask through the relationship owner | Now, if the CEO wants it; otherwise at a recorded trigger |
Step 1 is about foreseeability, not paperwork. The Sedona Conference's commentary on legal holds treats reasonable anticipation of litigation as the touchstone for the duty to preserve, judged objectively by what a reasonable party in the same position would have foreseen, and says the duty is clearly triggered when a complaint is served but can arise earlier. Whether that point has been reached for a given company is counsel's judgment, never the partner's.
Step 4 exists because licensing talk tempts people to tidy up. SourceX's published process puts de-identification after signing, inside approved processing routes, on the records the company approves, and the supplier confirms the data was not created or altered with AI for the sale. Edits made to originals beforehand are never part of that process. Near an investigation, they can be far worse: federal law at 18 U.S.C. § 1519 reaches anyone who knowingly alters, destroys, conceals or falsifies a record with intent to obstruct a federal investigation or a bankruptcy case, including one that is only contemplated.
The 90-day horizon in step 2 is this page's choice, matched to the attribution window; a deletion further out than that rarely forces the order.
Transition events that start a preservation clock
Most preservation questions arrive with a business transition. Each row names the event, what it can do to the records and who settles preservation before anyone talks about licensing.
| Transition | What it can do to the records | Preservation settled by | Licensing conversation |
|---|---|---|---|
| Demand letter or complaint received | Signals that litigation may be reasonably anticipated | Counsel sets the scope of any hold | After counsel releases or clears copies |
| Subpoena or government inquiry | Makes some records relevant to a matter | Counsel | After counsel clears it |
| Retention-schedule purge due | Destroys old records on schedule | Records owner, with counsel confirming nothing must be kept | After a decision to keep, or a verified copy |
| Enterprise tool contract ends | Vendor deletes its copy after the return window | Contract owner and system administrator | After the export is verified; see the contract-end review |
| Sale signed, closing pending | The company's freedom to act may be limited by the deal | Deal counsel | After closing, by the acquirer's CEO |
| Insolvency filing or formal wind-down | Control can pass to a trustee, receiver or assignee | Whoever controls under the process | Their decision, under the process |
| People who know the systems leave | Knowledge of where records sit leaves with them | CEO names a records owner | Once a records owner is named |
After an acquisition, retention schedules are often merged, and the retention guide for acquisitions covers how purge dates move. A parent and its subsidiaries count as one company for the once-per-company USD 50,000 floor on a first qualifying transaction, which matters when the records end up inside a larger group.
Three portfolio companies on the tree (Illustrative)
Illustrative. These companies, letters and dates are made up to show how the tree behaves; nothing here reports a real case or result.
Company A is a staffing firm with 180 internal full-time employees; its placed workers are counted separately and do not count toward the 50. A former client has sent a demand letter about billing, and IT planned to purge email older than seven years next month.
Company B is a 140-person engineering consultancy retiring its project system in 60 days, with no disputes and a founder-CEO who runs the company.
Company C is a 300-person distributor whose owners signed a sale agreement last week; closing is expected in about three months.
| Step | Company A | Company B | Company C |
|---|---|---|---|
| 1. Hold or expected dispute | Yes: counsel suspends the purge for affected mailboxes | No | No |
| 2. Dated deletion | Not reached | Yes: export verified before the retirement, then no | Not reached |
| 3. Change of control | Not reached | No | Yes: wait for the acquirer's CEO |
| 4. Edits proposed | Not reached | No | Not reached |
| 5. Ready and fit | Not reached | Yes: CEO wants a call | Not reached |
| Outcome | Preserve; revisit when counsel narrows or lifts the hold | Introduce through the relationship owner | Revisit after closing with whoever then decides |
A fourth pattern turns up in all kinds of companies: a founder offers to "clean out the messy tickets" before any call. That is a step 4 stop whatever else is true, and the answer is simply that the original records stay as they are.
Reopening the conversation after preservation, or standing down
Reopen when one of these has happened, and confirm it with the CEO rather than with counsel or IT:
- Counsel has released the records or said copies may be made.
- A verified export exists and the purge or vendor deletion has passed.
- The sale has closed and the acquirer's CEO is known and reachable through someone who owns that relationship.
Stand down, and record why, when the records are already gone, a hold is expected to last indefinitely, the CEO declines, a fit fact fails, or the archive is mostly clients' material, which SourceX's screening guidance usually treats as a poor fit. Data that has already been licensed for AI training elsewhere is also out: SourceX asks suppliers to confirm it has not been. The archive deletion checklist and the custodian status questions go deeper on the records side once the tree says the way is clear.
For the published fit facts: 50+ full-time employees at peak (contractors excluded), documented operating history, rights to license and an authorized CEO. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 70% of the data is in English.
Ways the preserve-first rule can backfire
- Keeping too much. Retention schedules exist for reasons, and some records are meant to be deleted when their period ends. Preserving everything indefinitely is not automatically safe, and counsel weighs both sides.
- Long holds. A hold can outlast any program's interest in a record type. SourceX's screening guidance notes that a company that does not fit one program may fit another later, so a long wait cuts both ways.
- Someone else asks first. Only the first valid introduction is credited, so a partner who waits may find another partner has already introduced the company.
- A preserved archive can still fail. Rights, client ownership and earlier AI-training licenses are all assessed later, and a perfectly preserved set can be declined.
- The partner is not counsel. This tree tells a partner when to step back. It is not legal advice, and its questions are prompts for the CEO to put to the company's own lawyers.
Methods note. The five questions, their order and the 90-day horizon were designed for this page. The attribution and duplicate rules come from SourceX's program terms; the fit facts from the who-qualifies page; the processing, ownership and supplier confirmations from SourceX's published process; the hold trigger from the Sedona Conference commentary; and the obstruction provision from the statute's text on Cornell's Legal Information Institute. All were checked on 2026-10-27. The tree does not measure how often holds delay introductions, or demand, record quality or payouts, and SourceX has not published such figures. To test it, log for each company the step that ended the walk and the date the conversation reopened.
Next step
Refer a company. No cap on rewards. Default reward on a company's first qualifying transaction: the greater of $50,000 plus 5% and 15% of Actual Supplier Payout, with no cap; further qualifying transactions first agreed within 12 months of the first Closing pay 15%. Eligibility and payment conditions apply, including the USD 100,000 Minimum Transaction, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.
When a company has passed all five questions and its CEO wants the conversation, register for a partner link, recheck it against who qualifies and read the attribution and duplicate sections of the program terms before the relationship owner asks; the venture platform teams overview explains how funds organize that ask.
Deciding when a portfolio company should hear about licensing is referral work, kept apart from any assessment of SourceX as an investment; anyone making that assessment can ask for investor materials through the SourceX investor overview.
This article is for information only and is not an offer to sell or a solicitation of an offer to buy securities. Any offering by SourceX is made only to verified accredited investors through its offering documents.