Due
diligence is a necessary step in the investment process.
Due diligence can be defined as the process
of investigation, performed by investors, into the details
of a potential investment, such as an examination of operations
and management and the verification of material facts.
Who needs due
diligence?
Due diligence is usually performed in association
with Merger & Acquisitions, as well as before deciding
on an equity investment to establish a company value. The
goal of the process is to avoid entering a bad deal, not to
locate the good deals.
How is a due diligence
performed?
The Due Diligence process starts with a Due Diligence check
list, a request for detailed data, tailored to the target
company. The received data is then analyzed from the sales
and marketing, operations, financial and legal points of view.
These analyses generally result in a series of requests for
information, which are again passed through the analysis process.
Ultimately, a list of critical issues emerges from the process,
which is then dealt with in final negotiations. Experience
states that more than half of the proposed deals subjected
to the Due Diligence process never make it to consummation.
This is exactly why the process is so important.
The Center for Innovation can help
The Center can perform a due diligence analysis on a prospective
equity investment, to give advice on the feasibility of the
investment/project.
For more information please contact:
Center for Innovation
Ina Mae Rude Entrepreneur Center
The University of North Dakota
4200 James Ray Drive
Grand Forks, ND 58203 USA
Phone: 701.777.3132
Fax: 701.777.2339
info@innovators.net
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