Learn how to do DD like a startup founder with these 66 checks (and learn how to spot shams)

General Situation aka The basics

1) Search for them in Google

2) When was the domain registered?

3) Are they incorporated?

4) 5 minute landing pages

5) Is there even a product yet?

6) Are there users yet?

7) Are there paying customers yet?

8) When was the first mention in Google?

9) Is this a re-invention of a previous business/ idea that founder is obsessed with?

10) Is this a clone of a similar business in the US or elsewhere?

11) Time from full time to launch, if more than 6 months then warning signs?

12) Is founding team full time? What % of staff are full time?

13) Overly large or ‘Rock Star’ Advisory Board

14) Was there an MVP, where is the validation?

15) Why did the founder start the company?

Founder

16) Background

17) Fake roles, e.g. Google Consultant

18) Previous startups aka projects

19) Cereal entrepreneurs

20) Where do they live?

21) Life situation

22) Still studying?

23) Do they have any other startups?

Capital Raise

24) Back door

25) Round not closed yet

26) Personal money?

27) Founder not willing to take any personal risk

28) Is part of the raise debt, or even revenue?

29) Is founder just extremely good at raising?

Development

30) Who is building the product, is it being outsourced, is there a CTO?

31) Is there a beta or pre-launch version?

Websites

32) Alexa

33) SEM Rush

34) MAU

35) Site content, market places, public metrics

36) Ambassadors/ Evangelists

37) Use Wappalyser

Apps

38) No. downloads

39) No. reviews (can be fake)

40) Bad reviews

41) App analytics websites

42) Actually use the app!

Growth aka Marketing

YOU KNOW THOSE RADIO ADS WHERE TWO ANNOYING PEOPLE WITH ANNOYING VOICES YAMMER BACK AND FORTH?

43) What are their main channels?

44) Do they have a growth framework?

45) Are they advertising?

46) Are they spending money on ads to collect emails?

47) Ads without a paid product?

48) How diverse are their channels?

49) The state of their content marketing

50) Content marketing without any real understanding?

51) Desperate or untargeted PR in hopes of referrals, e.g. startup founder talking about something irrelevant to the business

52) Collecting email addresses as part of a vanity metric

53) 🏆Retention🏆

Partnerships

53) What is actually involved? Did they just sign an MOU?

54) Marketing stunt

55) Is founder good at signing partnerships

Social

56) No. likes/ followers, are they fake?

57) Likes/ Post ratio

58) Do they speak the same language as the startup?

59) Are they getting shared/ retweeted?

60) Complaints

Where’s the money Lebowski??

61) Real source of revenue

62) Real revenue vs Equivalent Annual Revenue

63) 80/20 e.g. $500k revenue but $250k from one client

64) Cash flow that is not real

65) Burn rate

66) Cap table/ Who owns the shares, do core team have equity?

In Conclusion

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CEO\ Founder @simplywallst, semi pro windsurfer

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Al Bentley

Al Bentley

CEO\ Founder @simplywallst, semi pro windsurfer

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