What To Include in a Due Diligence Report

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

The due diligence report is written by the due diligence team.

It covers the financial, operational, legal, and strategic aspects of the startup.

A due diligence report for a startup investment contains the following:

Market analysis

This includes the size, growth rate, sectors, competition, and the startup's target customer.

Product.

The diligence report assesses the product for competitive advantage, defensibility, and scalability.

Financial.

The report reviews the financial projections to see if they align with the startup's team, product, and market opportunity.

Team.

The report covers the team's experience, skills, and industry knowledge to see how well it matches the startup's requirements.

Exit.

Reviews the various exit strategies and how to achieve them.

Here are the components of a due diligence report:

Executive summary

Purpose of due diligence

Financial

Legal

Operational

Market

Regulatory

Assets

Risks

Growth prospects

Conclusion

Appendix with supporting documentation

Consider these elements for your due diligence report.

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Let's go startup something today.

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Using the Four-Quadrant Slide

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

In pitching the startup, the founder shows how the business will be positioned in the market.

The four-quadrant slide is one tool to show how the startup compares to the competition.

Here's how to set up the four-quadrant slide.

Start by identifying the key criteria for customers.

This could be cost, performance, ease of use, or more.

Check the competition for how they rank on the criteria compared to the startup.

Choose the top two criteria and show how the startup's product performs.

Lay out an x/y axis and show one criterion on the horizontal axis.

Show the other criteria on the vertical axis.

Label the axis so the startup is positioned in the upper right corner.

Position the competition in each of the other three corners.

This communicates to the investor how the startup will compete and on which criteria they are superior.

This helps the investor understand the startup's position compared to the competition.

Consider using the four-quadrant slide in your pitch deck.

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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On this episode of Investor Connect, Hall Marchant welcomes Gillian Fenton of LST Strategies, who brings more than 30 years of experience in licensing intellectual property and life sciences transactions, including work with GSK, Emergent BioSolutions, and Biogen, as well as university startups, established life science companies, and investors.

Gillian shares how IP supports life science companies from inception through commercialization, explaining that patents are critical for protection and investment attraction, but that trade secrets, contractual rights, and IP-adjacent protections like FDA data exclusivities can also be central depending on the technology. She covers where startups underestimate licensing complexity—especially that licenses create long-term relationships unlike acquisitions—along with what "transaction readiness" looks like, including building a populated virtual data room early.

The conversation also addresses due diligence red flags such as chain of title, freedom to operate, and misaligned global patent spending, plus how diligence and FTO depth should scale as clinical programs advance. Gillian explains how Bayh-Dole obligations, government rights, US manufacturing requirements, and march-in rights can shape commercialization over a technology's lifetime, and she emphasizes aligning legal strategy with business strategy while adapting to disruptions in funding and the growing role of AI.

Visit LST Strategies LLC at lifesciencetransactions.com

Reach out to at www.linkedin.com/in/gillianmfenton, and on gillian@lifesciencetransactions.com

________________________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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Why Build a Financial Forecast

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

Startups should build a financial forecast for their business.

Even if the future is uncertain and all the data is not known, it's still important to build one.

Here are the reasons why:

It validates the founder's hypothesis.

A founder should have a hypothesis about the business.

A financial projection helps determine its feasibility.

It also determines how much funding to raise.

The financial forecast shows the cost to start and run a business.

The fundraise amount is a key component of the plan.

It communicates the plan to investors.

The investors want to know what the founder is thinking about the business.

This includes the growth rate of revenue, the size of the team, and the cost of doing business.

It demonstrates the business can become profitable and scalable.

The financial forecast also shows when the business will become profitable and how much money could be generated by it.

Founders should include a slide in the deck for the five-year financial forecast.

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.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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Be Founder-Friendly To Gain More Dealflow

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

Founders live in the center of the startup world and thus see many companies raising funding.

A startup investor will do well to tap into the knowledge of founders about other startups raising funding.

An investor who treats founders well will find they are often amenable to making referrals.

Here are some key steps on how to be founder-friendly.

Be timely with founders' requests for information such as signed term sheets and invested funds.

Make life easier on the founder, as they have plenty of other investors who will end up taking their time for special questions and unique situations.

Follow up investor updates with helpful information and words of encouragement.

As often as possible, try to help with founder asks including introductions.

Update the founder on what you are looking for in startups.

Ask for introductions to other founders where they fit the investment criteria.

Develop an expertise or skill that founders need and build a reputation for providing some level of it at no cost to founders.

This will give founders an easy way to introduce the investor to other startups.

Consider these steps for being founder-friendly.

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.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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Founderflow vs Dealflow

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

Startup investors spend their day looking for quality deals.

There are business plan competitions, demo days, and other formats where founders pitch.

Then there's warm introductions and referrals.

The quality of these deals tends to be higher.

Most investors don't take time to refer a low-quality deal.

Instead of looking for dealflow, search for founders

Look for successful founders and track their progress.

Here are several reasons to track founders:

They often know how to find good ideas for startups.

They know other founders who have found a good idea and are now raising funding.

They can help screen startups raising funding with more incisive questions.

They can help coach funded startups in the investors' portfolio.

They often know where to find quality deals.

They can make referrals to the ones that pass muster.

Build a network of experienced founders and check in with them often.

This is called Founderflow.

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.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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How To Qualify an Investor for Your Startup

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

Founders searching for investors need to qualify the investors for their deal.

Here are key questions to ask an investor before pursuing your fundraise:

Are they currently investing?

What was the most recent investment made?

How many of your funded companies achieved an exit?

How many of those exits were positive?

Do you make follow-on investments?

Do you lead fundraising rounds or only follow?

What operating experience do you have?

What do their portfolio companies say about the investor?

In most cases, the investor's money will be helpful.

The purpose of diligence is to understand what position the investor will take in the round.

In some cases, it's best to look elsewhere.

Consider these questions for qualifying an investor for your 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.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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For Investors check out: https://tencapital.group/investor-landing/
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Investing in Climate Tech

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

Climate Tech is an up-and-coming investment opportunity.

Here are the sectors, benefits, and risks.

The key sectors include the following:

Renewable energy such as solar, wind, and geothermal.

Carbon capture for capturing, storing, and utilizing carbon emissions.

Sustainable transport such as electric vehicles.

Smart agriculture such as vertical farming.

The benefits of investing include substantial subsidies from the government.

Also, the application is worldwide and will last a long time.

The risks include the following:

Many technologies are nascent and will ultimately fail.

Regulatory rules will come into play and may hamper business growth.

The timeframe for a return is in the long term if not very long term.

Look for technologies intersecting with green initiatives for opportunities.

Consider these sectors, benefits, and risks in your climate tech investing.

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.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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For Investors check out: https://tencapital.group/investor-landing/
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