Investment evaluation checklist

1. Choosing the investment opportunity

• Carrying out competitor analysis including identifying barriers to entry the market
• Collecting the following basic information about the object: names, addresses and contact persons of the company professional advisers, including principal bankers and investment bankers, legals and auditors
• Undertaking the market research by a third party to date
• Creating a list of all potential international and domestic market segments
• Measuring the market size
• Creating a comprehensive business plan
• Make presentation

2. Evaluation of the investment opportunity

• Defining and listing goals
• Evaluating return on investment (ROI)
• Estimating the payback period
• Comparing this opportunity with alternatives available on the market
• Creating reasonable and realistic financial plan
• Bringing independent professional advisors to the financial plan assessment
• Estimating terms when the business is expected to become profitable (interests and dividends)
• Checking if warrants or share options are attached to the object
• Checking if the object has convertible debts or subordinated debts

3. Evaluation of the investment opportunity risks

• Calculating potential loses and risk of the loss on opportunity
• If the project involves development of a new product, is there independent confirmation that it works
• Settling all the regulatory requirements (environmental, patent searches, technical, zoning, etc.)
• Determining the volume of financial and technological reserves
• Calculating the burn rate (if the business is doomed to be failed)
• Estimating your future share in investment after the founders get an interest for their "sweat equity"
• Defining your level of involvement in the project according to current Shareholders Agreement
• Confirming the legal structure of the investment by involving independent professional advisors
• Securing your investment by assets
• Checking future legal and financial bounds
• Making adequate insurance for assets
• Updating all tax assessments (income tax, payroll, etc) and related assessments

4. Evaluation of personnel involved in investment opportunity

• Make sure that ...

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