Technical Due Diligence

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Investing in startups requires due diligence.

In addition to financial diligence, an investor should consider technical due diligence.

Here are the key areas to review for technical due diligence:

Scientific risk.

This is the risk in deep tech startups that comes from basic science.

Look for startups that have de-risked science.

Technical risk.

This is the risk that comes from designing the product.

Look for a clear plan on what to build.

Check the skills of the team to see that they can build it.

Manufacturing risk.

This is the risk that comes from building the product.

Look for a plan for sourcing materials and components.

Check the requirements for producing the product.

Ecosystem risk.

This is the risk that comes from the product needing a specific environment in which to succeed.

Check the requirements for the product to operate in.

IP risk.

This is the risk that comes from a competitor's ability to copy the product.

Look for patent coverage that provides a strong defense.

Check these elements when running a technical due diligence on a startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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