Due Diligence and Fundraising Processes

Anyone who has seen a show like Shark Tank or Dragon’s Den is familiar with the concept. Investors research a company’s finances, legal documents, important individuals, customers suppliers, customers, and before making an investment decision. Investors must also conduct due diligence on the business plan of the company, market position, and growth projections.

Due diligence is an essential process in fundraising. It’s designed to verify information provided by potential donors. It usually involves thorough assessments and checks that are carried out by a prospect development department or by a specially-trained team. The scope of the study could be a lot of different and it is vital to clearly define the factors that are board management most important for your business.

The most frequently used areas of inquiry include:

Financial Details – A comprehensive review of the donor’s background including their financial history. This will typically include the past ten years including all assets, liabilities and earnings information.

Technical Information – Investors want to know what technology your product is using, and how it will scale in the future. Investors will also want to learn about your clientele and any pertinent contract information.

Other important areas to think about include: