Due Diligence In-Depth Process
As soon as possible after the Members Meeting, ATI will schedule a 2-hour Zoom meeting to dive into the questions on members’ minds. The members expressing interest are the core group of ATI attendees; as many of the management team as possible should attend. This meeting, like the Members Meeting presentations, is recorded for use by Members who cannot attend.
Requirement: At this stage, additional detailed information is necessary for Members to make investment decisions. The standard information requirement is found here:
- Reaffirmation of interest by members
- Selection of ATI Due Diligence Lead who will serve as primary contact for company management with ATI
- Initial planning of the diligence process with company and lead member
ENTREPRENEURS MUST REMEMBER TWO THINGS:
- Due diligence is performed by ATI members who are interested in the company
- Potential investors want to ensure they have measured the risk in an opportunity correctly
To accomplish this, ATI potential investors structure an analysis that is defined as: “what do I need to know about an opportunity to make a decision to invest?”
To ensure diligence moves quickly yet with sufficient rigor, ATI focuses its diligence on the most important matters, those that make or break an investment decision. We use a standardized report to communicate among our members.
The report templates can be found here:
You can expect ATI members to seek information from you and from research to answer these questions.
ATI DILIGENCE HAS 3 PARTS:
- Confirmation of statements made by management. This includes conversations with customers and prospects to verify that the company’s solution offers a real resolution of a problem of importance to them. It also includes verification that the technology underpinning the solution both works and is scalable, as well as background checks on management.
- Additional research, such as deeper investigation of the addressable market and competitive landscape, as well as reviewing the assumptions underlying the financial projections.
- Corporate document review. Proper organizational structure is necessary not only for the funding ATI is considering, but also for all future rounds, including VC funding, and for the sale or IPO of the business. Since most deficiencies in documentation occur in the earliest months of a company’s existence, ATI’s early diligence serves to identify any deficiency quickly, so it is easily remedied. This enables the company to be better prepared for future transactions as well as satisfying the needs of the one currently being evaluated.
ARE YOU READY TO APPLY FOR FUNDING?