Commercial Due Diligence

Financial statements and news releases aren’t sufficient to identifying appropriate investments. Orca provides Venture Capital investors and portfolio managers with experienced independent services to maximize medium and long term returns:

There are many situations in which institutional and venture capital investors do not wish to identify themselves when they first consider a company as an investment. At all times, clients have their identity withheld in strictest confidence until (and if) more substantive interaction is desired by the client. Even if confidentiality is not required, performing the initial due diligence can be onerous if overseas personnel are to be used.

In China, the due diligence approach is uniquely tailored to each client’s needs, usually focused on one of the following aspects generally not fully addressed in news releases or financial statements:

  • Site Visit: as a first step in the process, it is essential that a site visit and a meeting with the principals take place. While within China transparency remains an issue, nonetheless due diligence requires that the appropriate questions be asked, and that reasonable attempts are made to verify the information.
  • Strategic Evaluation:the company’s growth, marketing, and operational strategies are evaluated: Will the company’s products or services be marketable? Will investors understand the company and its prospects sufficiently?
  • Executive/Board evaluation:does the company have the right people in place to deploy its strategies? Have its governance practices kept up with increased demands from regulators and investors?
  • China Strategy Evaluation:: for western companies, China represents a huge opportunity and also significant risk: Does the company have a coherent strategy in place for China? Does it have the expertise, local contacts, and systems in place to maximize opportunity while managing risks?