Due Diligence and Fundraising Processes
Due diligence is an important aspect of fundraising, mergers and purchases, and corporate finance. It is also a crucial element of donor research and a well-done due diligence investigation can help identify risk to reputation and guide teams in drafting comprehensive donor profiles. Many organizations are re-evaluating their due diligence procedures in light of recent scandals that have involved universities naming their buildings for those who have committed financial crimes.
A thorough due diligence investigation isn’t an easy job and is only possible when your team is equipped with the right tools on disposal. Even the most powerful teams be a challenge to navigate through the growing ocean of publicly available information online, such as corporate blogs, news media, and gray literature. Tools for specific software are needed to help organize, search and share this information.
The COVID-19 epidemic has accelerated the development and use of new tools and techniques to identify potential reputational risk in donors, and also reduce the time needed to conduct donor research. Despite the rapid development of tools used in this field institutions must remain true to the most important aspects of their due diligence procedures including the need to conduct thorough background checks on donors and family members and the necessity of clear and consistent guidelines regarding limiting reputational risk and accepting gifts from donors.
Anyone who has seen Shark Tank or any show where millionaire investors put start-up entrepreneurs through their testing will be aware of the concept of due diligence. Investors will not invest in a company unless they’re satisfied with the documents Clicking Here and data presented to them, including those related to legal, financial, and tax compliance. This is the reason it is so important for startups to prepare themselves for the due diligence process prior to the time of pitch, by having all documents and information ready for investors prior of the presentation.