During the past week I've had two instances where I've had to dig up my standard Due Diligence template to email it to someone who was just starting the process of raising money for a new business. Since this seems to come up fairly often, I thought that I would just post the template here on my blog, and then refer people to it online and save the effort on my part. To get to the template, just follow this (link). This template isn't necessarily the most sophisticated or best in the world, but it is what I use routinely when evaluating a new investment opportunity. The idea is to summarize in a relatively standard (and short) form all of the critical aspects of a new business. Before a deal gets funded, there is typically a four to six page document created that contains all of this information and a 10-20 minute summary presentation made to a VC partnership where tons of questions are asked, assumptions challenged and general knowledge about the business environment are tested. Assuming all of this passes muster, the deal funding process moves onto the next step of negotiating terms of investment (Term Sheet).

After the investment is made, this document is still useful because there are times that as an investor, you will wonder why you did this investment (usually when things are going wrong), and what they originally forecasted they would have done by a certain point in time. It is useful to have a short, but detailed, summary of all of the critical aspects of a deal handy to review periodically.

For those that are new to this process, I hope this helps. For those that know more about it than I do - please feel free to pass on your wisdom!


Due Diligence Template: Link