Analysis of early stage companies is made more difficult by the fact that the information in the business plan cannot be confirmed by customers, personnel, banks, suppliers or an accounting firm because of the lack of a history. The problem does not disappear in the DD process, even if the investor uses outside experts such as consultants, lawyers or auditors. Outside experts are not able to analyse the company any better than the investor other than in a ”technical” capacity.
In the DD process, the investor makes a ”deeper analysis” of the company’s internal affairs and checks the accuracy of the information from various sources. Approximately 40–60 hours are usually spent in conducting a deeper analysis. A significant focus in the analysis is the team, customers, IPR, finances and other aspects relating to the administration of the company. One model of investment target assessment is shown in Appendix 1.