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The process of due diligence in venture capital is a crucial step that investors take before making an investment in a startup. According to Paulo Brignardello, It involves a thorough investigation of the startup's business, financials, and legal affairs to evaluate its potential for success and the risks involved.
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PAULO BRIGNARDELLO EXPLAINS THE PROCESS OF DUE DILIGENCE IN VENTURE CAPITAL PAULO BRIGNARDELLO HTTPS://PAULOBRIGNARDELLO.CL/
Initial Screening 01 A preliminary review of the startup's pitch deck, business strategy, and financial documents is the first step in the due diligence procedure. This is done to determine if the startup meets the investor's investment criteria and to look for any potential warning signs.
02 Detailed Analysis If the startup passes the initial screening, the investor will conduct a more detailed analysis of the company's operations, financials, and competitive landscape. This analysis is done to gain a deeper understanding of the startup's business and to evaluate its potential for success.
03 Financial Analysis Paulo Brignardello says that financial analysis is critical to the due diligence process. It involves a review of the startup's financial statements, tax records, and legal agreements. The investor will look for any potential financial risks or liabilities and evaluate the startup's financial projections to determine whether they are realistic.
MARKET RESEARCH • 04 Market research is another important component of the due diligence process. The investor will conduct market research to evaluate the potential demand for the startup's product or service and to assess the competitive landscape. This will help the investor to determine whether the startup has a viable business model and a competitive advantage.
05 Management Interviews The investor will also conduct interviews with the startup's management team, key employees, and customers. This is done to gain insight into the startup's leadership and to assess whether the team has the necessary skills and experience to execute on the business plan
Legal Review The legal review is another critical part of the due diligence process. The investor will review the startup's legal agreements, such as contracts with suppliers and customers, intellectual property agreements, and any pending litigation. This is done to identify any potential legal risks or liabilities that could impact the startup's future success. • 06
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