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’s finances, legal documents, key individuals, customers suppliers, customers, and before making a decision about investing. They also conduct due diligence on a business’s strategy, market position and growth projections.
When it comes to fundraising, due diligence is a vital method that is intended to verify the information provided by a prospective donor. It usually involves rigorous assessments and checks that are carried out by a prospect development department or a team of specialists. The scope of the investigation can be extensive and it is essential to define the criteria that are the most crucial for your business.
The most popular areas of inquiry include:
Financial Details – A thorough analysis of the background of the prospective donor including their financial history. This usually covers the past ten years and include all assets, liabilities, and earnings data.
Technical Information – Investors need to know what technology your product utilizes, as well as how it will scale in the future. They’ll also need to be aware of your client base and any contract information that could be relevant.
Other areas of inquiry include:
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