Everyone has their own methods for performing due diligence. DCA takes great pride in its detailed due diligence process, seeking to leave no stone unturned when it comes to looking at potential investments. The initial screening process focuses on: 1) vertical and market size assessment (the total market opportunity), 2) the Terms of the deal and the institutional lead, and 3) our initial diligence.
During the initial screening process, we look across these three categories at items such as discussions with the founder to better understand the history, the company’s role in the market, key management/talent (technical, sales, industry experts), and the overall team; initial review of the product to understand stage of development; discussion around critical company needs and the use of proceeds from the round; and high-level overview of the financials, both historical and initial forecast.
The next layer of diligence dives deeper into all key categories, particularly diligence calls, product assessments, competitor analysis, financials, and legal documents.