Q: What Happens During Due Diligence?
A: During the due diligence review process, interested investors will analyze the company in great detail. Entrepreneurs will be provided with a list of information they will need to make available for review. Entrepreneurs will also need to make members of their management team available for discussions. Additionally, entrepreneurs will be expected to pay any legal fees associated with the review. These fees will be discussed with the entrepreneur in detail before the due diligence process begins.
A possible outcome of due diligence is that the entrepreneur will be asked to consider a Strategic and Business Plan Review. This might include reshaping the strategic plan, refining the product offering, expanding the management team, focusing the sales effort, etc. The due diligence team will report its findings to WCC members along with a recommendation. If the recommendation is to proceed with an investment in the company, a term sheet will then be negotiated with the entrepreneur.