We’ve seen too many early stage ventures and their teams unprepared for the due diligence process, whether to be acquired or to get funded. It’s been a painful process for many of the companies we meet and it takes tons of CEO and executive time. It involves a rigorous review of your operations, products, technology stack, sales, customers, team/management and financial condition. It also takes you away from your customers, running your business and placing you at risk with your stakeholders.
To help you here, we went through several due diligence investigations by investors ourselves when funding our previous companies. We prepared a checklist of 15 items you might expect. There is a wide range of investor asks and focus areas. While you may not need to cover the waterfront with all the items on this list, it should help prepare you for the basics. Basics that are likely to be covered in your conversations with disciplined angel and venture funding groups.
The Due Diligence List and Questions includes these topics:
Organization and Good Standing
Financial Reports, Tax Returns
Business Plan & Valuation
Contracts, Agreements and Other Arrangements
Plant, Property and Equipment