Due Diligence and Fundraising Processes
Due diligence is a crucial element of fundraising processes in mergers and acquisitions and corporate finance. It is also a crucial component of donor research, and a thorough due diligence investigation can reveal 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 which have involved universities naming their buildings for people who committed financial crime.
It’s not easy to conduct an extensive due diligence analysis. Your team can only complete the task if they possess the appropriate tools. Even the largest teams can find it difficult to navigate through the ever-growing seas of publicly available data online, including corporate blogs, news media and grey literature. Tools for specific software are needed to organize, find and share this information.
The COVID-19 pandemic accelerated the development and application of This Site new tools and techniques to detect potential risks to reputation for donors, and to reduce the time needed to conduct donor research. However, despite the rapid evolution of techniques and methods in this field it is vital that institutions retain the most crucial aspects of their due diligence process, including the need for thorough background research on donors and their families and the need to establish clear and consistent policies for limiting reputational risk and accepting gifts from potential donors.
Anyone who has watched Shark Tank or any show where millionaire investors put start-up entrepreneurs through their paces will be familiar with the concept of due diligence. Investors aren’t likely to invest in a business unless they’re completely satisfied with all documents and information presented to them, including those related to legal, financial and tax compliance. This is why it is crucial for startups to prepare for due diligence prior to the time of pitch, by having all documents and information ready for investors prior to the start of pitch.
