Due Diligence and Fundraising Processes
Anyone who has watched a show such as Shark Tank or Dragon’s Den is familiar with the concept. Investors conduct research on a company’ finances, legal papers and key people suppliers, customers and other key individuals to decide whether or not they are investing. Investors will also perform due diligence on the business plan of a company, market position, and growth projections.
Due diligence is a crucial procedure when it comes to fundraising. It is designed to verify the information given by potential donors. It typically involves thorough evaluations and checks carried out by a prospect department or a specialist team. The scope of the study could be quite broad and it is vital to identify the factors that are most important for your company.
The most frequent areas of inquiry are:
Financial Details – A detailed investigation of the donor’s background including their financial background. This will typically cover the last ten years of their history, including all assets, liabilities and earnings data.
Technical Details – Investors would like to know the technology that your product uses, and how it will grow in the future. Investors will also want to know more about your clients and any pertinent contract details.
Other important areas to be considered include: