DILIGENCE CHECKLIST

What is your diligence checklist ?

Strategy & Company Overview

• History – why this idea
• Corporate Strategy
• Product Overview
• Pricing Strategy / Structure 
• Market Opportunity (SAM / TAM sizing in aggregate by product, additional target markets
• Competition / competitive positioning / reasons for attracting or losing customers, assessment of competition

Organization overview

• Growth strategy
• Near term and long term financial needs
• Barriers to entry
• Strategic partnerships, if any, future plans

Operations

• Review of research and development team, headcount by function / responsibility
• Review of current infrastructure and expansion strategy
• Review of Capex spend in model

Product / Technology

• Review technology / IP / review of future product applications
• Review of production costs, partnerships, vendor selection
• Review of impact of potential delays to company model / projections

Sales & Marketing

• Review pricing scheme / breakdown of technology revenue source
• Review of any commissions or distribution or embedded software attach rate
• Review of any current market / brand / marketing investments
• Review of process to track sales and management reporting
• Volume and sales forecast by quarter / year in forecast
• Review of customer acquisition strategy
• Review of projected customer levels by product mix over time
• Provide key sales inflection points and key drivers for ramp

Headcount

• Number of employees by function / responsibility
• Headcount plan in forecast
• Review of senior management
• Open critical roles to be recruited and when
• Review of typical compensation for employees over next 12 and 24 months including equity
• Review of any employment obligations
• Review of prior roles and no employee related IP cross over risk
• Employee confidentiality and invention assignment agreements (contractors as well)

Current Contracts with customers

• Review economic terms and IP ownership terms