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Due Diligence
Category
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Documentation
Task
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Owner
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Status
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Business Plan, Corporate
Structure, Financing
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Business
plan
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Current
five-year business plan
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Prior
business plan
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Corporate
organization
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Articles
of incorporation
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Bylaws
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Recent
changes in corporate structure
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Parent,
subsidiaries, and affiliates
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Shareholders’
agreements
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Minutes
from board meetings
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Shareholders
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Number
of outstanding shares
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Stock
option plan
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Samples
of common and preferred stock certificates, debentures, and other outstanding
securities
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Warrants,
options, and other rights to acquire equity securities
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Current
shareholders, including number of shares owned, dates that shares were
acquired, considerations received, and contact information
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Relevant
private placement memoranda and other offering circulars
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Lenders
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Convertible,
senior, or other debt financing
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Bank
lines of credit, loan agreements, or guarantees
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Loan
defaults or expected defaults
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Recent
corporate transactions
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Description
and rationale for each transaction
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Purchase
and sale agreements
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Regulations
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Business
licenses
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Environmental
permits
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Workers’
health and safety permits
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Marketing, Products,
Sales, Service
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Market
analysis
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Competition
by product line (include contact details, market size, market share, and
competitive advantages and disadvantages)
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Industry
and market research
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Trade
publications and contact information
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Marketing,
products, sales, and service
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Features
and benefits of product offerings
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Product
rollout schedule and product life cycle
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Copies
of patents and trademarks filed or obtained
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Pricing
strategy of product or service
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Descriptions
of existing partners and joint ventures
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Distribution
channels
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Promotion
tactics
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Top-10
customers by product line and total installed base
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Sales
and marketing presentations
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Product
catalogs and brochures
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Press
releases or articles written about the organization
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Professional
affiliations
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Customer
service strategy
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Contracts
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Major
contracts by product line
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Support/maintenance
contracts
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Warranties
and guarantees
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Other
customer-related contracts
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Supplier
contracts
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Technology
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Technology
strategy
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Overall
technical capabilities
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Technical
competitive advantages and weaknesses
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Technical
personnel
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Copies
of user documentation by product (current and historical)
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Copies
of technical requirements, code strategy by product (current and historical)
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Development
process
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Financial and Operations
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Financial
statements
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Three
years of historical statements:
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·
Income statement (P&L)
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·
Balance sheet
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·
Statement of cash flows
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·
Statement of shareholders’ equity
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CYTD
statements
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Most
recent five-year projections (pro formas)
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Monthly
sales projections and sales pipeline over next 18 months, including
assumptions
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Key
financial ratios
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Liquidity
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Leverage
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Operating
efficiency
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Profitability
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Return
to investors
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Taxes
and audits
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Historical
tax rate
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Federal
and state net operating loss carryforwards
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Tax
returns
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Summary
results of all tax examinations and audits
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Receivables
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Accounts
receivable turnover
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Accounts
receivable aging schedule
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Accounts
receivable control and credit policy
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Accounts
receivable seasonality
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Capital
expenditures
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Last
five years
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Five-year
gross projection
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Detailed
priority list
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Equipment
|
List
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Depreciation
method
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Age
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Liquidation
value
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Replacement
value
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Leases
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Lenders
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Terms
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Interest
rate
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Payment
schedule
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Litigation
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Current
litigation and potential damages
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Potential
litigation and potential damages
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Insurance
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Property
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Liability
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Workers’
compensation
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Other
|
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Information
systems
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Description
of infrastructure
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Security
layers
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Backup
strategy
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Human Resources
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Management
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Organizational
chart (including number of employees by department)
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Resumes
for key managers and key employees
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Management
stock incentives
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Compensation
and benefits
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Cash
compensation per employee (including salary, bonuses, commissions)
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Summary
of standard employee benefits (such as medical insurance, disability
insurance, vacation)
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Copies
of 401(k) and other qualified pension and profit-sharing plans
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Other
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Ownership
interest
|
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Employment
contracts
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Performance
evaluation criteria
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Material
transactions with insiders or associates of insiders
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References
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Executives:
Three references for each
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Attorney:
All legal relationships
|
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All
directors and significant affiliates; include
brief biographies
|
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Investors:
List all individuals and institutional investors
|
|
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Customers:
List of top 10
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Strategic
partners
|
|
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Consultants,
freelance workers (current and historical)
|
|
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Accountants
(current and historical)
|
|
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Bankers
and creditors (current and historical)
|
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Associations:
All industry associations in which company and management are affiliated or
active
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