Due Diligence is the process of conducting a thorough analysis of business projects. It consists of several stages.
Investors are usually advised to consult professionals who specialize in providing high-quality services. Due Diligence usually starts with researching the founders and management team and answering on a set of questions that would help investors to get an understanding of their previous experience, skills and competencies. After having researched the background of company’s founders, investors can proceed to legal documents that will help them to understand terms and conditions for investments to pay off. Potential investors explore business plan and financial model to have a clear understanding of technological advantages of the product and business model of the project.
The final stage of Due Diligence is double-checking all the information in order to make sure that company investors are willing to invest in are trustworthy, have consistency in their business-model, and comply with the law.