Due diligence

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Due diligence by Mind Map: Due diligence

1. Ownership, structure & capitalization

1.1. Paid in capital

1.2. Total common shares

1.3. Options and warrants

1.4. Issued shares documentation

1.4.1. Certificates

1.4.1.1. Legends

1.4.1.2. Copies

1.4.2. Board votes

1.4.3. Stockholder approvals

1.5. Model capitalization to exit

1.6. Capitalization legal opinion

1.7. No subsidiary

2. Intellectual property & licenses

2.1. Freedom to operate

2.1.1. patent searches

2.1.2. license agreements

2.1.3. infringement letters

2.2. Barrier to entry

2.2.1. filing dates

2.2.2. Other

2.2.3. switching costs

2.2.4. regulatory advantages

2.3. Intellectual property portfolio

2.3.1. Patents

2.3.1.1. Status

2.3.1.1.1. filing dates

2.3.1.1.2. geography

2.3.1.1.3. prosecution history

2.3.1.2. Ownership

2.3.1.2.1. assignments

2.3.1.2.2. licenses

2.3.1.2.3. Chain of custody

2.3.2. License agreements

2.3.2.1. Royalty

2.3.2.2. patent costs

2.3.2.3. fixed fees

2.3.2.4. termination clauses

2.3.3. Trademarks, copyrights, trade secrets

2.3.4. IP growth plan

2.3.5. Policies and procedures

2.3.6. Employment agreements

2.3.7. Legal representation

3. Management

3.1. Resume and CV

3.2. Outside activities

3.3. Governance

3.3.1. Advisors

3.3.2. Board

3.4. startup track record

3.4.1. References

3.4.2. SOS entities and standing

3.4.3. fundraising expertise

3.4.4. Environment

3.5. Investment in venture

3.6. Reasonable startup salaries

3.7. Responsiveness

3.8. Accuracy

4. Market

4.1. Customer

4.1.1. references

4.1.2. primary research results

4.1.3. product specification desires

4.1.4. Who buys

4.1.5. Who decides

4.1.6. Who pays

4.2. Competition analysis

4.3. Market size references

4.4. related portfolio companies

4.5. Checklist

5. Financial plan

5.1. Financials

5.1.1. Burn rate

5.1.2. Audited financials

5.1.3. Historical financial statements

5.1.4. financing history

5.1.4.1. Source of capital

5.1.4.2. Terms

5.1.5. Cash on hand

5.1.6. Schedules

5.1.6.1. Accrued expenses

5.1.6.2. liabilities

5.1.6.3. related-party transactions

5.2. Funding sources

5.3. Use of funds

5.4. Sales initiation

5.5. Breakeven point

5.6. total funding planned

6. Debt, equity rights & deal terms

6.1. Corporate form

6.1.1. Bylaws

6.1.2. C-corp

6.1.3. Charter and amendments

6.2. Previous series and terms

6.2.1. Preferences

6.2.2. Anti-dilution

6.2.3. Investor credibility

6.2.4. Valuation

6.2.5. Paid in capital

6.3. Other sources of capital

7. Technology

7.1. Platform technology

7.2. product-related

7.3. disruptive

7.4. stage of development (TRL)

7.5. Independent review and validation

7.6. protected and defensible

8. Other references for due diligence preparation

8.1. Checklists

8.1.1. ASME

8.1.2. Meritus Ventures

9. Business plan & pitch

9.1. Demonstrated traction in fundraising

9.2. Professional pitch and plan

9.2.1. Team

9.2.2. Value proposition

9.2.3. Competitive advantage

9.2.4. Market

9.2.5. Intellectual Property

9.2.6. Marketing plan

9.2.7. Operational plan

9.2.8. Regulatory plan

9.2.9. Government regulations

9.2.10. Financial projections

9.2.11. Exit strategy

9.3. Clearly articulated business plan

9.4. Reasonable use of funds

9.5. complete due diligence package

9.5.1. List of all contracts

9.5.2. Capitalization back-up available

9.5.3. Analysis complete

9.5.3.1. competition

9.5.3.2. intellectual property

9.5.3.3. revenue model

9.5.3.4. Faq available

9.5.3.5. Technology validation

9.5.4. Diligence checklist