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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30+ Questions You Could be Asked About Your Startup During a Screening Meeting with an Angel Group
The curse of the entrepreneur: you have this great idea and it looks like it will do really well. The problem? You lack the capital and the skill to build it. What’s the solution? Giving Away Startup Ownership.
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.
An effective way to begin is to get acquainted with your regional entrepreneurial ecosystem. Your regional ecosystem likely provides numerous opportunities to participate, network and become acquainted with other entrepreneurs and investors in your region.
Examples of such opportunities are included in FundingSage’s Entrepreneurial Ecosystem Spotlights, and include opportunities such as entrepreneurial meetups and events, startup competitions, co-working and makerspaces, incubators and accelerators, and colleges and universities programs.
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.
All companies face risks. Startups are no exception. As the entrepreneur considers seeking financing from third parties, it is important that they recognize that once financing is obtained, the business no longer exposes only the personal resources at risk, but also that of their outside investors.
Angel and venture capital investors may receive hundreds or even thousands of executive summaries each year. With their time being limited and the competition for their attention intense, it is extremely important that the entrepreneur provide executive summaries that “Wow!”
Columbia, SC ranks number two of the TOP 10 Cities with the Lowest Startup Costs.
(source- smartasset.com, September, 2015)
There are a variety of reasons for this reaction from investors:4 Reasons Why Startup Investors View Debt As A Mortal Sin! To avoid the purgatory of being non fundable, entrepreneurs should consider the investor’s view and structure their balance sheet in an “investor friendly” manner before submitting an executive summary and financials to startup investors for consideration.