Due Diligence Services for Angel Investors
Every wise and profitable angel investor conducts due diligence on the founders, company, and business opportunity before making an investment decision. A well constructed due diligence process should uncover any potential 'gotchas' such as:
- Prior Bad Acts and/or Fraud by the Founders and Executive team;
- Irregularities in accounting and taxes filings;
- Confirmation of Intellectual Property rights, customer and vendor engagements, and employee agreements;
- 3rd party validation of market opportunity, competition, and barrier to entry;
- Assessment of capital requirement as part of the go-to-market strategy, the availability of anticipated follow on capital or additional financing, and the likelihood of obtaining an exit;
- Industry expert assessment on feasibility of the timeline and cost to bring the proposed product or service to market;
- Review of logic, assumptions, and thoroughness of financial projections;
- Personality and Leadership Style of the Founder/CEO and other key members of the executive team, to anticipate and prevent a toxic corporate culture;
- Overall review of business plan and pitch documents, looking for inconsistencies and misrepresentations; and
- Business review of offering terms to highlight unusual or unfavorable terms and their implications to the investor, not a legal review.
There is never a guarantee that an investment in a private company will produce a return on investment, simply because the future and the obstacles to success are unpredictable. However, by having a system for conducting due diligence, angel investors can eliminate the indicators that have historically negatively impacted a company and its founders' ability to succeed, therefore directly impacting the loss or return on investment.
Kugarand Capital Holdings offers three levels of Due Diligence Services for Angel Investors.
Fixed Fee Due Diligence Offering
Our Fixed Fee Due Diligence offering conducts a Level One review of the highlighted elements of due diligence and completes the KCH Due Diligence check list. The investor(s) will receive a written report documenting any short falls and gaps that may be of concern to the investor and potentially influence the investor decision.
That fee may range from $3,000 to $10,000 depending on the scope of the project, amount of capital sought, and the stage of company.
Variable Fee for Due Diligence Offering
Our Variable Fee Due Diligence offering conducts a Level One and Two review of the highlighted elements of due diligence and completes the KCH Due Diligence check list. We engage the 3rd party industry experts, legal and financial experts, to assist our team in reporting as thorough as possible due diligence review. The investor(s) will receive a written report documenting any short falls and gaps that may be of concern to the investor and potentially influence the investor decision. As appropriate, opinions will be offered as to how to remedy the gaps and shortfalls to reduce the risk and strengthen the investment opportunity.
There is a base fee, plus the cost of the additional resources, which may fluctuate depending on the scope of the project, amount of capital sought, and the stage of company.