Due Diligence

Where do the red and yellow flags come from? Some from the initial pitch. Most from the due diligence process after the pitch. This is a long, complex process that begins by questioning that business plan (or pitch).

This is a key lesson for Angels and as such we present the topic twice, once as taught at the Angel Accelerator powered by AVPA (focused on Africa) and again at the Angel Accelerator powered by Fledge (tied to its namesake global startup accelerator. The two lessons are similar but not identical.).

What are all the documents that the (potential) investee should provide you to review?

Next, question the market opportunity. Is it big enough to bother looking even further into this company?

Next, question the marketing plan, the sales process, and the organization of the sales team (internal or external).

The key to success is timing, luck, and team, and finally we take a look and question the team.

Next, take a deep dive and full tour of the product, and look under the covers to review the operations.

Is there any cash in the bank? Are there any debt due? What is the current status of the business?

Is it solving an important problem? Is this company making a positive impact on the world? Will it if all goes as planned?

Finally, we look to see if the company has dotted all of its legal i’s and crossed all of its legal t’s, and we finish up questioning the risks of this investment opportunity.

Lastly is Q&A from the Angels