Startup Funding Espresso Preparing the Diligence Documents
Preparing the Diligence Documents Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors interested in your startup will want to perform due diligence on the deal. Diligence is a standard process investors go through to review all the relevant documents and checkmark all the boxes before investing. In preparing your diligence documents consider the following: Start with a checklist of potential items to include. Most due diligence lists are comprehensive and include many items not applicable to an early-stage company. Start with the standard documents which include the following: Entity filings -- investors want to see documentation on your LLC or C-Corp filing.\xa0\xa0 Many investors only invest in Delaware C-corps.\xa0 You may need to change your entity filing to meet the investor\u2019s requirements. Patent filings -- half the value of submitted patent filings are for investors as it demonstrates a competitive advantage. Consider filing provisional patents in advance of a fundraise.\xa0 These are relatively simple documents compared to full patent submissions. Three to five-year financial forecasts -- you\u2019ll need detailed financial projections showcasing your vision of how you will spend the raised funds and the business results from it. This needs to be bottom-up analysis and not a top-down estimation. Cap table -- this is the list of the current equity owners and what percentage each one has. Organization chart -- this shows the current employees and their positions. Gather these core documents into one folder that you can give to interested investors. If you consider the information confidential, then you can ask the investor to sign a Non-Disclosure Agreement. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .