Article via BetaKit – We’ve talked a lot over the last few weeks about what it takes to get a deal on the table, either to raise funding or to get your company acquired. Today, I’m going to draw off my book Funded as we dive into what it takes to close a deal — in other words, how you prepare to ace the due diligence process.
“Due diligence” is a term given to the investigation or audit of a potential investment. Throughout the due diligence process, investors look to confirm all material facts in regards to a sale. Almost all investors conduct at least minimal — and sometimes extensive — due diligence on the deals they invest in. Investing in early-stage companies is risky, and conducting due diligence can reveal problems with a company’s business early on, allowing investors to identify the key risks. This will allow them to either develop a risk mitigation plan with the company or to back out of the investment altogether.
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