A Commercial and Financial Due Diligence can be carried out for an investor (for financing or acquisition purposes). The target company should be not older than 10 years (since incorporation) or have more than €5m in revenue. For larger companies I would involve additional consultants.
The analysis cover:
* Shareholding agreement, general legal setup and litigation risk (general, this is not a legal dd)
* Contracts and eventual leasing agreements
* Past financing
* Operational plan
* Administrative tools
* Product development and identifiable risks
* Market and international risk
* Barriers to entry
* Preliminary traction
* Market validation
* Marketing strategy
* Funds available
* Financial plan and Budgeting
* Team (commitment, experience, functions covered, company culture)
* Information basis (completeness and missing information)
* Investment risks
* Business risks
* Control systems (financial, commercial, strategy)
Tax or Legal matters require a separate tax or legal due diligence.
For growth stage startups the work will need to be conducted on-site.
A company on sale can also request a Vendor Due Diligence to increase the chances of being acquired and to speed up the due diligence process of the potential acquirer.
A separate DD will take place for every subsidiary in a group of companies if necessary.