Getting Funded: Step 4, Due Diligence

Passionate Intensity

Tweet You made it through the partner meeting , your email dings, your phone rings — good news: the VCs liked your company enough to proceed to the next step: due diligence. Due diligence is a two-way street. ” Due diligence is all about verification.

Getting Due Diligence Ready


So, if you have not done so already, I recommend picking up a Neat scanner and getting yourself due diligence ready. Getting Due Diligence Ready. There are two types of due diligence: business and legal. Business Diligence. Legal Diligence.

Trending Sources

Clean Up Before Raising Funding

Instigator Blog

If you get to the point where you’re about to marry a VC and take their money, there will be a due diligence process. Deal with IP Assignment as quickly as possible; you don’t want to leave any loopholes in there that will scare investors away.

Startup Blog: Intellectual Property (IP) and Know-how: Defined

Taffy Williams

Monday, March 21, 2011 Intellectual Property (IP) and Know-how: Defined This blog will eventually discuss several key issues relating to your technology, including: selection, acquisition of rights, due diligence, commercial market, time to market, end users, size of market, and much more.

Protecting IP in Crowdfunded Deals

Angel Investing News

Investors will eventually want to validate the intellectual property (IP) prior to investing but not just to hear about the opportunity. After hearing an interesting presentation, these professional investors will engage with the entrepreneur in a process called “due diligence,” an exhaustive review of the business plan. Unfortunately from what I read, crowdfunders expect to invest in the next potential IPO in which IP may play a huge role in the success of the company.

Getting Funded: Step 4, Due Diligence

Passionate Intensity

You made it through the partner meeting , your email dings, your phone rings — good news: the VCs liked your company enough to proceed to the next step: due diligence. Due Diligence” is a broadly defined term with explanations here: WikiPedia , Webster’s , and elsewhere. You want a diligence period because this is also a time for you to do your checkup of the fund and the people offering to finance his company. Due diligence is a two-way street.

Nuts & Bolts of Intellectual Property for New Startups


Having covered all the bases to ensure that your corporate name is available, the domain name can be acquired, and the name doesn’t infringe any existing trademarks (as we discussed last week ), now is a good time to look at the categories of intellectual property (IP) that are relevant to most startups. Second in importance only to talented people, IP in all its forms is the key asset comprising most of the value of any tech startup.

The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

Mistake #2 : not buttoning-down IP ownership issues (at 10:20). Mistake #5 : not doing your due diligence on potential investors (at 38:36). Mistake #2: Not Buttoning-Down IP Ownership Issues. Mistake #5: Not Doing Your Due Diligence on Potential Investors.

The Audacious Plan to Make Electricity as Easy as WiFi

Both Sides of the Table

I seldom hire patent attorneys during due diligence but this was too important. We hired IP specialists to review prior art. We grilled their IP attorneys. When I first met Meredith Perry she was 24. That was three months ago this week.

Qualcomm’s Corporate Entrepreneurship Program – Lessons Learned (Part 2)

Steve Blank

Since there weren’t corporate resource for further evaluation, (one of our programs’ constraints was not to create new permanent infrastructures for implementation,) we had no choice but to assign the idea to a business unit and ask them to perform due diligence the best they could. (By

The 5 Biggest Legal Mistakes That Startups Make

Scott Edward Walker

My law firm recently entered into a new partnership with This Week in Startups and sponsored their live fireside chat last month in San Francisco with authors Nick Bilton and Brad Stone.

Virtual Data Room Cybersecurity is the Latest Business Opportunity

The Startup Magazine

M&A due diligence is the primary application of the VDR. Fundraising mandates involve lots of document and data sharing during due diligence investigation. IP Management. Such companies need VDRs to store related IP-documentation.

5 Sure-fire Ways to Bomb Your Investor Pitch

Up and Running

This is when you start sharing stuff about your market potential without having first done some deep due diligence on your market opportunity.

The Top 4 Items You Need Documented When Selling Your Website Through a Broker

Blogtrepreneur | Entrepreneur Blog

These financial details will ultimately need to be corroborated with all merchant credit card, banking accounts and tax returns during due diligence when an offer is accepted so the buyer can confirm without any doubts that the numbers are accurate.

The Unbiased And Updated Guide To Selecting The Right Hosting Company


Evidence exists that your hosting IP address can affect your SEO and traffic from Google , particularly if your users are concentrated in a specific geo-location/country. Choosing your hosting company without due diligence can result in loss of customers, reputation, and sleep.

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4 Deadly Legal Mistakes That Startups Make

Scott Edward Walker

IP Ownership. There are three deadly mistakes that relate to intellectual property (IP) ownership, all of which usually surface when the investors conduct their due-diligence investigation: 1. Any IP created or acquired by a founder (e.g.,

Startup Valuation: How Much Is Your Company Worth?

Seed Stage Capital

Pitch it with passion, while addressing any issues or ‘warts’ candidly and honestly (they will come out in due diligence anyway). skip to main | skip to sidebar 19 January 2010 Startup Valuation: How Much Is Your Company Worth?

Webinar Recap: 14 Tips on How to Pitch and Get Funded

Up and Running

Make sure you’ve done the due diligence on all of these areas of your business. You have to do some due diligence. Last week, Bplans members had the opportunity to attend our free webinar, “14 Tips on How to Pitch and Get Funded.”

Getting Series A Ready


Due diligence ready: all existing legal docs, employee confidentiality and IP assignment agreements, etc are organized and ready for review. - Company’s existing investors are participating in the round.

Preparing For An Acquisition


In addition to setting a solid baseline for historical financial information, an audit engagement is a good test run to experience what the due diligence process may look like for management going through an acquisition for the first time.

allensblog: Why Entrepreneurs Shouldn't Worry about NDA's

Allen's Blog

are not the areas in which IP matters much.  That said, I can honestly assert that, from my experience, an awesome idea, adequately covered by available IP protections -- but with crappy execution -- never wins. Entrepreneurs should always perform due diligence in all they do, but should not be overly anxious about NDAs, particularly if the angel investor in question has an outstanding track record, and is reputable. allensblog. Thoughts from a startup sherpa.

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The Inside Story of a Small Startup Acquisition (Part 3)

Software By Rob

Could you talk a bit about the diligence you did during the acquisition? How long into the discussion before you commenced diligence? Due diligence is the most important part of the process because it dictates whether you should move forward with the acquisition, and at what price.

Startup Blog: Inventions & Patents are Critical - The Technology.

Taffy Williams

You will find that in any due diligence review potential partners or investor will spend an extensive amount of effort evaluating your NewCo’s patent estate. Prior art will allow the examiner to take a position that the invention was obvious due to public data!

HBS Angels Healthcare Night

David Teten

C8 Sciences ( [link] ) markets web-delivered cognitive development programs based on Yale IP of integrated computer and physical exercises. Cell>Point ( ) is a late-stage biotech-molecular imaging and therapeutics company with strong IP. Please note that all angels, members of HBS Angels or not, are responsible for their own due diligence.

Startup Blog: Tips on getting a partnership for your early drug.

Taffy Williams

Your potential partners want to see · evidence (such as a biomarker or structure activity relationships) that your efficacy is due to hitting the presumed target, · how to determine the dose in the clinic, and · which patients are most likely to respond.

Startup Resources

IP Location Tools. British Library Business & IP Centre : Funded by the London Development Agency, the British Library supports inventors, small businesses and entrepreneurs from that first spark of inspiration to successfully launching and developing a business. Diligent.

Time is the Enemy of All Deals

Both Sides of the Table

We moved into the legal process and final due diligence in January and February of 2000. If it’s a biz deal you might care about IP protection, revenue share, investment commitments to joint marketing – whatever.

Shout Out to Seth Levine, or the In-N-Out burger startup

Scalable Startup

Investor groups are cutting out the management, bus dev, sales, and marketing professionals, trying to get raw, young engineering teams that have never negotiated a term sheet to give away their IP rights and equity for next to nothing.

Eric Sink. Things I learned in selling Teamprise to Microsoft. Video & transcript.

Business of Software Blog

We did the preliminary due diligence, you know, that room with 14 people in a conference room, they called that "preliminary due diligence" and they grilled us all day. And then you start what's called the "due diligence" process.

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A Compilation of the Web's Best Advice for Entrepreneurs

Platforms and Networks

skip to main | skip to sidebar Platforms and Networks Thoughts about platforms, network effects and entrepreneurship Wednesday, November 25, 2009 A Compilation of the Webs Best Advice for Entrepreneurs Below, I link to blog posts and other online resources that offer advice for entrepreneurs. My selections are tailored for consumer Internet startups, but should be helpful to teams in other sectors. There’s a lot of information here, so don’t try to digest everything in one session.

Web 14

Preparing to Wind Down a Business: What information do you need?

Ask The VC

When you buy an existing business, you typically do what is referred to as "due diligence" to make sure you know what you are buying. Similarly, when you are winding down a business, you must do your due diligence to make sure you know what assets and liabilities the company still has and how best to handle them. Is there software or technology (or other IP) that could be licensed? What payroll taxes will be due?

Someone Stole My Startup Idea – Part 2: They Raised Money With My.

Steve Blank

During the due-diligence process, I sat down with one of the partners who pulled out a set of slides and asked me: ”Have you seen these?” Someone Stole My Startup Idea – Part 3: The Best Defense is a Good IP Strategy » 24 Responses Tweets that mention Someone Stole My Startup Idea – Part 2: They Raised Money With My Slides?!

Revisiting Paul Graham’s “High Resolution” Financing

Both Sides of the Table

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. As I’m generally a believer in ‘pricing rounds’ I initially didn’t agree with the premise of the post.

CEO Friday: Why we don’t hire.NET programmers

Expensify Blog. Expense Reports That Don't Suck. CEO Friday: Why we don’t hire.NET programmers. Update: The end is near, Expensify is hiring a.NET programmer! Learn more… Saturday edit: Wow, quite a response to this. Some additional comments at the end. Sunday edit : Still going!

Java 62

Startup Blog: Licensing Technologies from Universities ? Tips for.

Taffy Williams

Universities have an obligation to ensure that their technology benefits society, so due diligence provisions should be a part of every license. Think Ahead When You are Negotiating IP Rights A Few Great Links to Startup Articles ▼ April (11) Beyond Rumsfeld by (Stephen A.

Beware The Consultant

The ultimate irony is that when we later sold the Company for a substantial amount of money, it was discovered during due diligence that the prestigiously inept firm (whose name rhymes with a type of pasta) screwed up a basic corporate filing. IP) is an ugly thing at a startup. About Who the Heck is Uncle Saul?

We’re Asking the Wrong Questions

Ask the Angels

Before we get tied up in legal and financial due diligence we should be working out the exit. Since there is a fundamental difference between a trade sale based on inherent revenue and profit generation from one based on exploiting an underlying patent or other form of IP, these are critical to an evaluation of whether the venture can be prepared for sale. I recently reviewed a set of investment ready criteria published by a respected Angel Group (not the Pasadena Angels).

Crossing Boundaries

Launching Tech Ventures

For instance, the systems used for intelligence analysis in the government have not cross-pollinated with investment due diligence tools, even though they face similar data collection and analysis challenges. What is the likelihood of disintermediation – how much unique IP are you bringing to the equation that would be prevent the partner or your potential clients from later going direct?

Raising Capital: Fundable Businesses

Entrepreneurship Blog

Furthermore, it's rare that features have deep enough IP to be protectable or valuable. Knowing what a meaningful exit for the firm is key to understanding whether or not the business will ultimately be considered fundable and should be a part of the due-diligence done by the entrepreneur prior to meeting with the VC.

4 steps to effective Disaster Recovery planning

Active Garage

As organizations – and their customers – increasingly rely on database, server, and IP-connected applications and data sources, the importance and responsibility of maintaining continuity of the business infrastructure and limiting costly downtime in the event of a disaster, is paramount.