- What is the Corporate form and how are is the entity capitalized? While I do work with sole proprietors, I often counsel partnerships, LLC’s and other pass thru entities as well as C-Corps.
- Is the company a non-US entity and do (or should) particular tax or liability concerns dictate form?
- Is the current form of business proper now? I often talk to clients about conversions from pass thru to C-corps and other changes of the corporate form.
- What are plans for financing? All equity or some convertible notes?
- Has the business or founder entered into shareholder rights agreements with any investor or other founders?
Valuation. I am often asked to assist clients tell the story of their valuation as part of a businesses’ drive for capitalization and the financing of a business as well as for investor clients who seek to understand or challenge valuation.
- Analysis often turns to considerations of value versus valuation when a lack of market comparables.
- Are your business plan assumptions for revenue, costs of goods sold rock solid?
- What does due diligence reveal about validation of data, sales pipelines, customer agreements and engagement data and path to revenue?
Decision Making. An entity client must have clear management roles and methods for decision making. How is the Board informed? How does Management make decisions and resolve internal dissent?
- How a business make (or does not make) decisions is informative. Do they take the approach of the Wright Brothers and engage in fact based conflict – testing assumptions, plans and data or does the Company have low push back on their business plan and validation issues?
- For shareholder/investor clients, what is the make up of the Board and how does the Board inform management decisions?
Agreements and Revenue. What kinds of agreements does the business enter into to make revenue, make, distribute and promote their product or services? What is the risk – reward balance?
- Does the Company enter into master service agreements with most customers and strategic partners or customized service agreements?
- Does the business depend on a third party’s service level agreements for cloud based services, up time, delivery?
- To what extent does the Company indemnify suppliers for infringement and other third party claims? Is there appropriate insurance in place?
- What is the logistic supply chain for the business’ product delivery, fulfillment, post sales service?
IP. What role does IP play in the business’ competitive advantage and what type of advice has the business received to date?
- What is a client’s IP Strategy? While I do not register patents, copyrights or trademarks for clients but I apply over thirty years of strategic IP experience to an IP portfolio including licensing, potential infringement and interaction with patent counsel.
- Does the Company develop its core technology in-house or for hire with a third party vendor or contractors?