Anyone who has watched a show such as Shark Tank or Dragon’s Den will be familiar with concept of due diligence. Investors will research a business financials, legal documents as well as key individuals as well as suppliers and customers in order to decide whether or not they are investing. They will also perform due diligence on the business’s model of operation, market position and growth projections.
When it involves fundraising due diligence is a vital process that aims to verify the information provided by a prospective donor. It typically involves thorough checks and assessments that are conducted by a prospect department or an expert team. The scope of your study could be extensive, so it’s crucial to establish which criteria are most important for your company.
The most popular areas for questions are:
Financial Details – A thorough analysis of the prospective donor’s background including their financial background. This typically covers the past 10 years which includes all liabilities, assets and earnings information.
Technical Information – Investors want to know what technology your product uses, and how it will grow in the future. Investors should also know about your customers as well as any relevant contract details.
Other important areas to consider include:
