Due diligence is not just for large corporate deals. At Metricson, we have seen how a good (or bad) due diligence can make the difference between sustainable growth and a legal problem in the medium (or even very short) term.
Here are 5 key moments when you should consider due diligence to ensure things go smoothly:
1. Before closing a funding round
Seems obvious? It’s not, because many entrepreneurs focus on other aspects and overlook that the investor will also do their homework. Anticipating with a comprehensive due diligence can save you delays in negotiations when you thought everything was ready. So keep in mind due diligence in investment processes.
2. When you buy another company
Acquiring a company, no matter how small, is not a simple transaction. Right before the purchase, due diligence can help you identify poorly drafted contracts, unregistered intellectual property, or unforeseen tax contingencies. But if you don’t consider it… it might be too late!
3. When you decide to sell your company
Don’t wait for the buyer to pull out the magnifying glass. If you want to avoid price discounts, endless liability clauses, or even the deal falling through, do your own due diligence before going to market, as we already recommended in our post about vendor due diligence. Knowing your risks and strengths gives you power in negotiation.
4. Before entering new markets
Expanding to another country or region may involve legal obligations, licenses, different labor regulations, and new tax regimes. In these cases, it is necessary to carefully analyze the new requirements before starting operations in that country. Thanks to our network of partners in over 20 countries, we can help you understand these needs and prepare the necessary actions to comply and prevent your business from failing at launch.
5. When you change your business model
Are you going to monetize data? Sell to the public administration? Every change involves new legal responsibilities, risks, and regulatory requirements. Due diligence can help you detect them before problems begin.
What if you’re not in any of these cases?
If you have a company, any time is a good time to perform a self-diagnosis. At Metricson, we offer critical risk or red flags reports, aimed at companies that want to discover and avoid risks associated with their growth, and maximize their value in a future transaction.
This is a simple report, with concrete recommendations and an action plan to accelerate updating and compliance with legal requirements as much as possible.
Do you have any questions about due diligence or are you at a point where you need one? Talk to us and we’ll take care of everything. Because it’s clear that with due diligence, prevention means growing with confidence. And at Metricson, we are revolutionizing due diligence.
Article written by:
Lawyer – Corporate & M&A
pilar.casasnovas@metricson.com
About Metricson
Metricson is a pioneering firm in legal services for innovative and technology companies, specialized in corporate law and due diligence processes. Since its founding in 2009, it has advised more than 1,400 companies from 14 different countries, including startups, investors, large corporations, universities, institutions, and governments.
If you want to contact us for any legal advice, do not hesitate to write to us at contacto@metricson.com. We look forward to hearing from you!