Due Diligence Preparation Service

Whilst most due diligence processes focus on the business plans, calibre of the executive team, scalability of operation, forecasts and budgets, we additionally consider technology, production and operations from different perspectives,  alignment with business plans and opportunities for cost reduction or greater efficiency. We drill into the technical details to check the product is manufacturable and has been designed with best practices in mind.

Our Due Diligence process

 

As we originate from a technical background with a commercial awareness required to assess the opportunities towards greater differentiation, we consider the benefits of new technologies that may be introduced and that may not have been considered; and potential risks to the business reputation.
We ask in depth technical questions, because for us the product or service sometimes receives the least due diligence. We are qualified to assess the technical details and the the teams that are required to execute the business plans.

Key Benefits for the Investor

Our direction allows an investor to fully understand the merits or otherwise of the target company’s technology, and the potential for value enhancement, before it is committed to an investment. We ensure the investor gains both technically and commercially-focused pragmatic insight from relevant experts to supplement the usual due diligence processes.
Our final report puts into perspective the complete business opportunity, allowing the investor to make a sound decision on whether to invest as any risks will have been highlighted with potential solutions or mitigating circumstances, a short list shown below;

  • The context of the business plan compared to the technical and operational challenges, assessing how the company has ,or is prepared for growth
  • A complete technical overview of the product or service, including a risk assessment.
  • Implications of any material risks both for the investor and for the company seeking investment.
  • Risk assessment and plan to mitigate any risks and weaknesses
  • Estimated relative priorities and indicative costs for mitigating any risks and weaknesses
  • What opportunities exist to enhance value through improved deployment of technology, or value engineering.

Our final report is an actionable document. Our findings and recommendations will form an important part of the due diligence process and is invaluable to investors.

 

Key Benefits for Companies Seeking Investment

 

We use our due diligence service to prepare companies seeking investment. We review the entire business in the same way we would for an investor but looking at the report in a different way. Instead of preparing a report to an investor considering investment, we work with the company to prepare them for the due diligence process. Many companies enter a funding round totally unprepared, and as such risk losing the funding opportunity, not because the product or service was not as claimed, but because the business does not look robust enough or prepared to demonstrate it can execute against the business plan.
If your company is preparing for investment, call us today and let us help you prepare for that important introduction to the investor.

 

Due Diligence Preparation Service for tech companies preparing for investment, Series A,B C, VC rounds.

We welcome Investors looking for a second opinion

For the Investor

We carry out due diligence for investors currently investing or considering investing into a tech business. The due diligence we provide gives investors a clear, accurate and unadulterated view of the business they are considering investing into,

We have worked with some investors who have already invested in a company but things are not going to plan, We approach the company to troubleshoot the problems with the intention of protecting the investment and the business that received the investment, looking for solutions in the first instance, as the problems may not be with the product or the business opportunity, but lie within the team.

We have seen investors invest in a technology that ultimately did not deliver what was promised. Companies may oversell their technology by overstating its capabilities, or they may fail to pursue rigorous scientific and technical procedures with respect to the efficacy of their technology.

Sometimes investors get caught up in the narrative of the company and this is why we firmly believe in a thorough due diligence process. Due diligence is the responsibility of investors and the team that carry out that process.

A poor due diligence process can mean everyone is simply relying on the credibility or the pedigree of the management team, they risk investing in products or technology that is ultimately proven unsound.

Due Diligence

investor support

Due Diligence Preparation Service for tech companies preparing for investment.

We have a commercial awareness that allows us to evaluate any product in the tech industry. The product or service is irrelevant. Whether the product is a hair dryer or the most complex tech product imaginable the same rules apply. The technical details are based around electronic, electrical and mechanical details all of which we understand thoroughly, and whilst the product may, on paper, look like the next big invention, if commercially it does not add up then it does not automatically make sense to take that product to market. Because we understand the electronics and tech industry so well we can spend a few hours looking over a BOM and have a good idea if the companies BOM costs and subsequent gross margins look right.

Reliable, credible technical due diligence is critical to both investors and investment targets. Individuals or companies seeking to invest in technology need to be sure of its validity, while inventors and companies seeking investment must be certain they communicate the true value of their technology honestly and accurately.

Admittedly, sometimes there are a lot of questions to ask, but then investors going through a due diligence process do so as they are making important decisions. That said, it’s also important to respect the cost of time for both those doing the due diligence and the company seeking investment. 

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Where Can It Go Wrong?

analysis

  • Expectations of investment amount versus equity is unrealistic 
  • Lack of transparency from members of the team within the company looking for investment.
  • Unable to use capital to drive revenue growth.
  • Short runway whereby the company cannot accurately identify the cash burn. 
  • The TAM (Total Available Market) is too small for the investor.
  • Lack of Vision.
  • Dedication. Are the personnel in the business dedicated to the business 100%,
  • Potential IP infringement and Freedom To Operate not clear.
  • Nothing or very little in the business that is proprietary or defensible.
  • Product costs.
  • Technically, the company cannot backup the technical submissions. 
  • The market sector the product is aimed at is unlikely to accept the expected product sale price.
  • The BOM cost cannot be validated
  • The electronic design is not as robust as claimed.
  • No Reliability data

Time spent on the due diligence process is an investment in itself, many companies that do not secure investment learn a great deal and return better prepared with a more attractive proposition, and more likely to secure investment.

Contact Us To Discuss Your IP Concerns or IP Strategy.