due-diligence-checklist

Vocabulary Word

Definition

A 'due diligence checklist' is what you use when buying a business to make sure there are no hidden issues. Kind of like a checklist you'd use to buy a used car, but for a business.

Examples in Different Contexts

In startup funding, a 'due diligence checklist' is used by investors to vet startups before making an investment. An investor might state, 'Our due diligence checklist includes an evaluation of the startup's management team, business model, and market potential to ensure a sound investment.'

Practice Scenarios

Legal

Scenario:

We're currently conducting risk analysis on a company we're looking to merge with. There are several areas we'll need to assess.

Response:

Yes, let's start with a due diligence checklist to mitigate potential legal risks in this merger.

Business

Scenario:

We are looking to invest in that new startup. We need to understand their financial standing before taking a decision.

Response:

Absolutely, we should perform a detailed review using our due diligence checklist to inform our decision to invest.