Due Diligence

Paper Summary:

This paper explains that venture capitalists make appropriate risk assessments, called due diligence, to find out if they are really and truly buying the company, an interest, or a product as presented in that infamous "fine print". The author points out that the checklist delineates a request for various kinds of documents from the company or the producers in question with whom the venture capitalists are dealing. The paper relates that the due diligence checklist includes a list of banks or other lenders with whom the future company might have a financial relationship, including credit agreements, debt instruments, and other agreements evidencing outstanding loans to which the company is a party or was a party within the past two years.

Table of Contents
Introduction
Checklist
Corporate Documents Regarding ChipeX Company and Subsidiaries
Issuances of Securities
Material Contracts and Agreements
Employees and Related Parties
Memo
Conclusion

From the Paper:

"This is a financially chancy and dicey time for technological investment. According to some of their independent analysts, the microchip to be developed by the aforementioned former members of ChipeX Company is a sure thing. This alone, however, should raise red flags. Even though the technical viability of the product has been sung in its praises by many technologically forward independent experts, in business, particularly the business of technology, experience and the dot.com bomb has taught us all that there is no sure thing."

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