1) What is the product/service?
- Product/service characteristics
- Nature of the product (disruptive technology, better solution, lower cost, etc.)
- Barriers to competition
2) Who is the company?
- Management (prior business/background, personal motivation, ownership, compensation issues, personal financial condition, “right stuff?”)
- Ownership (visa vie key managers, Board involvement, implied valuations)
3) What stage is the Company?
- Revenue history, profitability, operating cash flow
4) Who are the customers?
a) Historical and/or projected
b) Macro issues
- Aggregate market size
- Drivers of demand (fear versus greed)
c) Micro issue
- Target list of near-term customers
- What drives a given customers decision to buy the company’s product
- Sales/marketing plan (short-term and longer term, branding)
5) How is the product/service produced?
a) Creating the deliverable
- Pre-production (talent required, IP, regulatory, site selection, capex required, construction timeline, etc.)
- Production processes (cost, complexity, vulnerabilities, logistics)
b) Challenges to production/competition
- Regulatory, “art”, capex, logistical
- Barriers to entry
6) How does the company make money?
- Gross margin analysis
- Pre-tax profitability and cash flow
- Balance sheet review (capitalization, use of debt)
7) How will investors be paid back?
- Equity – what is the future liquidity event (strategic sale, recapitalization, IPO, etc.
- Debt – Company’s cash flow generating capacity, etc.