Entrepreneur’s often make these simple mistakes during due diligence that cost them the ability to receive funding. Do any apply to your startup?
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Experienced entrepreneurs know that they are preparing for the investors due diligence from the very beginning. They establish a process that supports the development and growth of their investable company. In order to begin that process, you must know what the investors will request and why they are requesting it.
David S. Rose, the CEO of Gust and Founder of the New York Angels defines Due Diligence in his book, Angel Investing – The Gust GUIDE TO Making Money and Having Fun Investing in Startups. The careful investigation into a company prior to making an investment.
As the startup proceeds through the due diligence process related to a potential investment from an angel group, VC or Corporate VC, (CVC), the process will include discussions and reference checks with a broad base of the start-ups’ constituents.
Investable companies don’t occur by accident. In fact, the opposite may be true; many companies may accidentally become un-investable. This article is part #2 of a two part series that shares tips as to why startups may be investable enabling them to obtain funding from angel groups and VCs.
Investable companies don’t occur by accident. In fact, the opposite may be true; many companies may accidentally become un-investable.
Preparing the due diligence package is no longer a separate, sequential item. Once the major items related to the startups stage of development are completed, the due diligence package is ready for the investor.
A principal goal in the life of a scalable startup company is getting external equity funding. The closing of a funding round is cause for celebration. However, founders are often left with a somewhat bitter-sweet taste when they realize what just happened.
The greatest hurdle to getting startup funding is providing the Investor with the information that illuminates your company and shows the details of why you are “investable.” That is the process of creating a world class Due Diligence package.
Concept stage startups are usually funded by entrepreneurs, family, friends and individual angels. An opportunity has presented itself to you, an idea for a scalable business you see clearly in your mind. How much is your idea worth? It all depends on what you do with it.