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Due Diligence for Startups

Due diligence is what an investor goes through when they have decided to look closely at investing in your startup. Charise Flynn, former COO at Dwolla and Founder of c.Results, shares best practices.

Investors will likely request the following items as part of their due diligence requirements: detailed financial plans, pitch decks, organizational charts, patents, trademarks, copyrights, logos, contact info, customer info, past financial statements, legal opinions and more.

Due Diligence Checklist

When you have a lead investor interested in investing in your company, you need an organized way of communicating and delivering important documents. Box or Dropbox are a few of the file-sharing sites that allow users to easily share documents. Read through the common due diligence checklist Charise touches on in the video.

Due Diligence Best Practices

A few of Charise’s tips are below:

  • Organize pitch decks by investor in separate folders. Each investor is different and the relevant pitch deck should be available to each one separately. Creating separate folders helps you stay organized as pitch decks change as well.
  • Do not share due diligence data too early. Until you have a term sheet with the investor and trusting relationship, you don’t want to overshare your documents.

The Raising Capital Seminar is an annual event in Greater Des Moines (DSM) that helps small businesses and startups grow and secure funding. Hear from founders and angel investors and learn how to take your business to the next level. To find more information on when the next annual Raising Capital Seminar takes place, as well as view past event videos visit the Raising Capital Seminar page.