# Diligence Questions ## Team * What led to the formation of this company? * Does the team have operating experience to measure? * What is the quality of the previous operating experience? * Do they have prior experience managing teams? * What are the founders’ unique skillsets to tackle this problem? * Do the founders have complimentary skill sets? * Can the founders work together? * How did the founders meet? * What is the expected window of opportunity for each founder (how long can they go with suppressed income)? * Is this an authentic idea that is true to the founders’ passion or a hollow attempt to make money? * Have the founders hired somebody before? * Do the founders have a network that allows them access to talent? * Are the founders charismatic enough to attract talent? * Are the founders based in a market that allows them access to talent? ## Business * Is the business model clear? * Who within the organization are you selling to? * Why do users care about the product / service you are offering? * Does the targeted person / role have authority to make purchasing decisions? * What is the value proposition? * Is the value created easy to measure or will it take time to market the ROI? * What organizations / people are you selling to? * What is the customer profile (role within the organization; demographics)? * What steps need to happen in order for a buying decision to be made? * Will target customers be able and willing to pay a fair price for your product? * Who is the largest customer today? * Who are the competitors? * Are you a first mover? * Is the product better, cheaper, or faster than existing solutions? * Is the product incrementally better or 10x better than alternatives? * What features do you offer that your competitors do not? * Why do your users care about these features? * What is your competitive advantage? * How defensible is this advantage? * How easy is it to replicate your competitive advantage? * Why would a buyer leave a competitor for you? * Is the company building on top of other platforms? * What is their relationship with the platform they are building on top of? * Are product plans in the direct path of the platform, or is it complementary? ## Market * Are you selling into an existing market, or are you creating a market? * Is the market large enough to for the company to capture a significant chunk of it? * What are the megatrends over the past 24 months that lead you to believe this is an expanding market? * Is there a shift in consumer behavior that strengthens this market? * What are the barriers to entry? * How strong are the barriers to entry? * Are there regulatory challenges within the sector? * Has investor interest increased or cooled off over the past few quarters? * Have investors already invested in a competitor? * Is the timing right and why? * Have other similar companies been formed before? * Why have other similar companies failed? ## Technology * How much progress has been made towards product development? * Does the company have to create new tech, or are they building off of existing infrastructure? * Has the product been built in house, or is it outsourced? * Who is in charge of development? * Are there any patents pending or issued? * What is the product roadmap, and what new features are users asking for? * Is the product roadmap realistic and can it be executed in the proposed timeframe? * Can the largest customer influence pricing, product roadmap, etc.? ## Financials * How much money does the company have in the bank? * What is the current monthly burn? * What is the burn rate going towards? * Does the company have enough time to meet its proposed goals? * How much runway does the company have before requiring additional money? * Is revenue assumed, or is there evidence that people / customers will buy your product / service? * Are customer contracts prepaid or not? * Are there different pricing tiers? * If there are different pricing tiers, which tier is most popular? * What metrics are you tracking? * How have these metrics changed over the past year? * Why are you focusing on these metrics? * What is the trailing top line growth over the past year? * What are the projected growth rates? * What assumptions are driving growth rates? * What percentage of revenue does the largest customer contribute? * How were existing customers / clients sourced? * What are the churn / retention numbers? * Have much of the company is still controlled by the founders? * How large is the ESOP (employee stock option plan)? ## Strategy * How are you planning to market to the specific users you are targeting? * What is your customer acquisition strategy cost today, and how do you see this strategy evolving? * How are you recuperating the acquisition costs? * Is there an opportunity to up-sell or cross-sell, or will LTV of the customer be derived from recurring revenue streams? * What steps are being taken to ensure you are solvent enough to reach your next milestones? * What are the biggest holes in your business today, and what steps are you taking to fill them?