Anyone who has seen a show like Shark Tank or Dragon’s Den will be familiar with the concept of due diligence. Investors will research a business’ finances, legal papers, key individuals and suppliers, as well as customers to make a decision about investing. They must also perform due diligence on the business’s model of operation, market position and growth projections.
When it due diligence and fundraising processes concerns fundraising, due diligence is a vital procedure that is designed to verify the information provided by a prospective donor. It usually involves rigorous tests and assessments that are performed either by the prospect department or by a specialist team. The scope of the study could be quite broad, and it is important to define the requirements that are most important for your business.
The most common areas for inquiries include:
Financial Details – An in-depth review of the background of the prospective donor including their financial background. This will typically include the past ten years which includes all assets, liabilities, and earnings data.
Technical Details Investors should know what technology your product uses and how it is expected to grow in the near future. They’ll also want to be aware of your client base and any contract information that could be relevant.
Other areas of inquiry might include:
