You need to have due diligence to show all the financial details for future investors. These details will help assess the benefits and opportunities of your business.
Your due diligence package should include:
- An executive summary,
- a business plan including 5-years of financial projections,
- historical financial statements (if applicable),
- industry peer analysis report,
- the private placement memorandum,
- outlining risks of the investment.
Investors will also have access to a financial sensitivity tool, a dynamic spreadsheet where they will be able to change up to eight (8) different business plan projection assumption and view the changed financial results immediately.
Due diligence is necessary from a legal standpoint as well. After the transaction closes, the investor has been notified of any pitfalls for the investment.
Your due diligence may include matters of competition as well. This would educate the investor completely of the market they are investing in.
So take some time and review our resource center as you prepare your due diligence.