Thu, 28 July 2022
Startup Boards -- How to Perform Diligence in a Group
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
In performing due diligence in a group of investors, it helps to assign roles and responsibilities.
There are three phases to diligence:
The lead investor should take the three steps and assign each of these to one person or group.
Assign the first team to review the key documents and write a short report on what the company has and if there are any discrepancies with the submitted documents.
Assign the second group to review the startup team. Meet with the team, assess their skills, and write a short report. In most cases, you’ve heard the CEO pitch, but it’s important to understand the CEO’s skills set, including what is there and what is not.
Assign the third group to research the competition. The group should check the positioning of the company in the marketplace.
Identify the value proposition and how well it resonates with customers.
Look at their pricing compared to the competition.
Check the industry to see the conditions in which it will grow or decline.
Remember to write down in one document the findings to share with others.
The lead brings the group together to review the results and check any red flags.
Shared documents and folders make this step easier.
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