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Startup Due Diligence for a Venture Capitalist

Startup Due Diligence for a Venture Capitalist

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What is Venture Capitalism?:
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Learn why startups fail so often
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How can we identify future failures?
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Step One - Filter out the terrible products:
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Specific product details
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Must-have or nice-to-have?
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Rate of growth
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Market size
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Market share
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Location of startup
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Plans for future products
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SWOT analysis
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Step Two - The Founding Team:
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Enthusiasm
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Trustworthiness
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Expertise
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Ability as a team leader
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Learns from mistakes
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A solid business plan
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Number of employees
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Employee salary and benefits
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Team chemistry
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Unified mission and direction
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Relationship to founder
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Step Three - Financial Viability:
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Current debt
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Cash flow
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Check Income statements
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Quarterly projections
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Calculate net gains and losses
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Exit strategy
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Step Four - Evaluate the Competition:
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Know exact competition
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Growth stage of competition
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Reputation of competition
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Realistic market share projection assuming competition survive
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SWOT analysis
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Step Five - Legal:
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Patents
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Trademarks
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Insurance
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Past lawsuits
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Last Words: