Due diligence is an essential stage in the process of fundraising. It can expose serious risks that might Clicking Here otherwise be overlooked. It’s also a way to show a company’s professionalism and efficiency. By providing investors with a well-organized data room that contains documentation that is relevant to the specific evaluation of their investment can make an significant difference to your funding outcome.
Investors will likely scrutinise your company’s finances along with legal documents, key personnel, employment contracts, and suppliers. Investors will also examine the legality of your intellectual portfolio, and may request evidence of ownership. Investors should be aware that you have licensed or contracted to lease your IP instead of owning it directly. This will affect the value and viability of your business.
In the digital age news can quickly spread and reputational damage can last forever, especially for nonprofits. To minimize the risks, fundraising due diligence should no longer be seen as a one-off process performed only on a single prospect. It should be a continuous broad-based process that includes many potential investors.
Due diligence in fundraising must include research from a variety of publically accessible online sources. This research must be compiled and presented in clear, readable and complete reports that are easily reproduced. Automated platforms are the ideal solution to this difficult requirement. Human teams cannot always achieve it. They can scour millions of data sources, decode and cross-reference with ease. They can create a digestible, categorised reports that are customized to meet the specific needs of each prospect’s decision-making needs.