Regardless of the valuation method you adopt (and you may wish to use multiple ones), each startup must be carefully examined for weaknesses to mitigate needless risk. Whilst the returns are potentially high, so are the risks. Due diligence provides a thorough investigation into a potential business investment. With large, established companies listed on a stock exchange, this process is easier as you can use the internet to quickly look up performance history, company records and analyses by experienced professionals to help inform your decisions. With startups, however, the process of due diligence is often harder. There is a standard due diligence checklist you will likely want to work through when vetting your startup investment prospects.
These might include:
Intellectual property (IP) Does the startup own the necessary IP and patents to protect their business logo, products, ideas, code and domains?
Team Who is running the show? What are their characters and personalities like?
Market size How many potential customers are there for the startup to reach with its products and services? Could it easily pivot into other markets if it wanted to?
Competition & market share How many existing companies are already offering similar solutions to the target market, and what is their market share?
New entrants & pivoting How easily could other businesses and startups enter the field that your startup prospect wants to occupy? Is there a high barrier to entry?
Product/code review What is the quality of the startup’s product (i.e. for a B2C retailer), or how robust is the code for a SaaS company (software as a service)? For the latter, is the platform able to be scaled easily to meet rising customer demand?
Financials How well has the startup’s revenues been managed, to date? Where has it been invested/committed, and do these management decisions appear wellgrounded?
Digital strategy & presence A startup is unlikely to have its website featuring at the top of Google search engine results, since this takes time to build. However, the business should have a viable digital strategy in place.
Where have the startup’s revenues been invested/committed?
Invitation
Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available.
Professional Guidance
Whether you are a professional investor with years of experience, a curious spectator looking to know more, or someone who is preparing to take the plunge in to an extremely exciting space in the UK, then it is always advised that regardless of experience, you seek expertise.
Bure Valley group has been supporting the growth and development of businesses and investors for many years, covering traditional and emerging sectors. Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group?
Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here.
コメント