Anyone who has seen shows like Shark Tank or Dragon’s Den will be familiar with concept of due diligence. Investors research a company’s finances, legal documents and key people, suppliers and customers in order to make a decision on investing. Investors must also conduct due diligence on the business plan of the company and market position as well as growth projections.
When it comes to fundraising due diligence is an essential procedure that seeks to confirm the information provided by a potential donor. It typically involves thorough tests and assessments that are conducted by an individual department or a specialist team. The scope of the study could be quite broad and it is vital to identify the requirements that are most important for your company.
The most frequent areas for questions are:
Financial Details – A comprehensive investigation of the donor’s background including their financial history. This usually covers the last ten years and includes all assets as well as liabilities, earnings, and data.
Technical Information – Investors need to know the technology that your product utilizes, as well as how it will expand in the future. Investors should also know more about your clients as well as any relevant contract details.
Other important areas to consider include:
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