Due Diligence Mistakes

There are several mistakes one can make in the due diligence process.

Here are a few points to check:

Focusing on every potential risk in the deal and not the primary risks.

In this case, diligence turns into a never-ending slog with no endpoint.

Many CEOs are successful entrepreneurs who did well elsewhere and are now working in a new area. 

The CEO must be experienced in the domain of the startup.  

Does the company have real traction in the market?

It’s often the case they have a few key customers who jump-started sales, but there’s no real momentum.

Will customers buy the product in sufficient numbers?

The market demand must be great enough to grow the business. 

Does the team have a focus on the exit strategy?

Make sure the team knows their exit and has a strong sense of it. 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.