Part I: Doing Due Diligence to Find the Right Investor
Make sure you do your homework.
There has been much written and discussed about the due diligence process investors conduct on the companies for which they are considering an investment. Someone once described this process as ‘opening the kimono’. The investor check list covers everything about the company and the kitchen sink including corporate compliance records, finances and taxes, employment and labor issues, business contracts, intellectual property rights, and litigation concerns.
Before you enter into this process with an investor, as a start-up CEO, you should do your own due diligence to make sure you are talking to the right investor. The key message: Beware. Not every investor is ideal for your business.
Here is a handy check list to can guide you through your search for a potential investor. Above all, do your homework. Know what you want from an investor and the types of investors in the marketplace. And absolutely examine their past and current investments, much of which can be found with simple searches via Google, LinkedIn, company websites and available government filings, and take the time to speak with companies they’ve invested in. Read more: click image or title.
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