Due Diligence and Fundraising Processes

Anyone who has watched a read review show like Shark Tank or Dragon’s Den is familiar with the concept of due diligence. Investors conduct research on a company’ finances, legal papers, key individuals as well as suppliers and customers in order to make a decision on investing. Investors should also conduct due diligence on the business plan of the company, market position, and growth projections.

Due diligence is an important process when it comes to fundraising. It is designed to verify information provided by potential donors. It typically involves rigorous tests and evaluations conducted by a prospect development department or a dedicated team. The scope of your investigation may be wide, so it’s important to clearly define the criteria that are most important for your business.

The most frequently used areas of inquiry are:

Financial Details – A thorough examination of the background of the potential donor including their financial background. This will typically cover the past ten years which includes all assets, liabilities, and earnings information.

Technical Information Investors will want to know the technology that your product is based on and how it will scale in the future. Investors should also find out about your customers and any pertinent contract information.

Other areas of inquiry might include: