Due-Diligence Framework
At SGC Angels we lay great emphasis on due diligence (DD) of startups. No deal is complete without due diligence, an essential element that every founder must focus on. It is indeed a pre-requisite before funding the startup. SGC strongly suggests startups be in readiness for due diligence. This will categorize the value propositions, weaknesses, and improvement areas of the startup.
New founders might find the due diligence process tedious because their attention is required for various set-up tasks. Therefore, SGC Angels provides a customized checklist and roadmap to ensure that due diligence is carried out methodically and constantly; they are –
1
Legal and Regulatory Compliance
2
Founder’s equity audit
3
Financial Assessment
4
Employee and Consultants
5
Evaluating the capitalization Table
6
Appointment of Board and Stockholders
7
Technical Audit
8
Ownership of the intellectual property
Due diligence checklist is indeed a robust way of assessing early-stage business startups. Nevertheless, it is important to underscore that each startup is unique. Hence, they may require additional governance depending upon the sector, industry size etc.
Considering this checklist as a base, investors like SGC can make sound decisions about their funds. Simultaneously, startups can also be ready and expect questions on their ask. Once you pass the due diligence test, the stage is set for strategic partnerships that will drive your startup’s growth.
