October 12, 2019 at 12:41 am
#37453
Dale Deg
Participant
A few thoughts that I have regarding your question are, although the DD of a start-ups financials would typically show no profit, they are still important to carefully review. There might be unusual movements of monies that could show “funny stuff” happening under current management. Good and proper spending on assets and IP would be important too, since these would be factors in the valuation of the start-up. Within the financials would also be cross referencing data relating to compensation of key employees, which would help during the DD, to understand what the potential costs would be in order to retain those key employees.