Due Diligence
Extensive due diligence is of critical importance to the success of an NTV investment, more so than is the case for typical venture capital or private equity investing. In contrast to these latter equity transactions, where due diligence is performed primarily to evaluate and validate an investment proposal made by a firm submitting a business plan for investment consideration, NTV must actually identify and formulate the business and investment opportunity based on a research discovery. The due diligence process will define:
| Capabilities enabled by the technology | |
| Strength and breadth of intellectual property position | |
| Market identification | |
| Business definition | |
| Management needs, timing; candidate identification and recruitment | |
| Development plan and risks |
In particular, due diligence focuses on:
Technology: capabilities, significance, proprietary nature, degree of validation, “platform” nature vs. single products plays, uniqueness.
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Market assessment: market size, unsolved need met by the technology, competitive structure, sales and distribution channels.
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Development plan, product offerings, operational assessment: timing and resource needs for technological validation, product design and evaluation, operational issues such as design and production issues, management needs and timing, facilities-related concerns.
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Financial and business model evaluation: definition of the business model and implications on financial performance and funding needs, profitability and growth potential, valuation implications.
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Management recruitment and evaluation: identification of key management needs and timing, identification, and verification.
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| Corporate: structure, intellectual property position, additional IP needed, critical encumbrances, institutional requirements, etc. |
"Where a business is not as yet defined, but technology is available, we'll work to identify the business opportunity."
-Gordon Hoffman
