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CMBC Advisory
  • Home
  • About
  • Services
    • Startup Founders
    • Startup Aspirants
    • Investors
    • Growing Businesses
    • Family Business Owners
    • Company Formation
  • Yzer
  • Good News
  • Contact Us

InvestorsWe offer you expert Due Diligence pre & post Investment

Pre-Investment Due Diligence

The Pre-Investment Due Diligence is a comprehensive systematic investigation, verification and evaluation of the prospective project before funds are committed. Following factors warrant serious due diligence before committing investments into a Project:

  • Long term commitment of capital
  • Long gestation period without any committed return
  • High cost of failure
  • High probability of not achieving the projections and need of further finance
  • Inexperience, ethical and legal misconduct of entrepreneurs

Due Diligence Activities

  • Comprehensive analysis of business plan
  • Sector & Industry Prospects assessment – Facilitation
  • Assessment of market potential of the products/services- Facilitation
  • Verification of financial projections and assumptions
  • Realty check on the business volume projection assumptions
  • Documents Verification – registration, incorporation, employment contracts, vendor contracts, material procurement contracts, environmental and civil compliances, labour compliances, patents, copyrights etc.
  • HR policies, Compensation & Benefit Plan, , Talent Acquisition Policies, Employment Demographics etc.
  • Background and reference checks of the top management/entrepreneurs/founders
  • Corporate Governance
  • Impact Assessment- Political, Competition & Technology- Facilitation
  • Capital Structure and ability to service– Debt, Equity, Preference Shares, Agreement to future equity etc.
  • Central Bank and Regulatory Authority Rules Compliance for Investments, repatriation of capital and dividends/interest
  • Capital Market/Stock Exchanges/Security Market Regulator Rules for Promoter stake, Public holding, disinvestment, Listing
  • Income Tax aspect on Investments, Dividends, Interest etc.

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Post-Investment Due Diligence

The key points of inquiry during the Post Investment Due Diligence Test will be:

  • Financial Performance – Actual vs Projected
  • Liquidity
  • Changes to the Capital Structure
  • Any update or changes on the business interests of the key Principals/Founders
  • Litigation or claims against company or associated individuals
  • Pertinent labor issues – Facilitation
  • Bribery or corruption-related concerns- Facilitation
  • Regulatory issues that could impact the investment
  • Major Commitments
  • Partnerships
  • Product addition/withdrawal
  • Material market changes, Competition, Governmental policy changes- Facilitation
  • Taxation Laws changes

The Due Diligence can be conducted either as regular ongoing monitoring or as focused/customized investigations as and when needed

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