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Due Diligence
In order to reduce the risks that are always involved
in corporate finance transactions, it is now standard practice to
conduct due diligence on the company to be invested in. Fortus Management
Partners provides its clients with a thorough analysis of potential
acquisition or funding targets' business plans, reviewing everything
from corporate records to management, product and organizational
capabilities.
This due diligence comprises the following tasks:
- Research all information pertinent to a financing decision
- Perform a detailed review of company to make sure there are
no "hidden skeletons"
- Assess the benefit to risk ratio and provide a matrix of the
strengths and weaknesses, opportunities and risks involved in
the transaction
- Document all findings and conclusions related to transaction
both to best inform all parties as well as to provide legal evidence
of due diligence
The following points are examined and documented within the framework
of a due diligence project:
- Basic company data (company statistics, history, etc.)
- Strategic overview of company (business practices, corporate
strategy, etc.)
- Review of the viability of business plan
- Determination of the future capital requirement
- Issues external to corporation (market momentum of technology
space, macroeconomic setting, etc.)
- Corporate financial health and structure (balance sheet, accounting
system, contracts, liquidity)
- Corporate structure
- Assessment of company value using discounted cash flow (DCF),
productive value method market, and/or transaction-oriented evaluation
- Analysis of the overall market and specific competition
- Technical and market analysis of company's product viability
and future potential (ARPU, COGS, etc.)
- Sales strategy and opportunity
- Product competitiveness
- Legal and tax situation
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