The following describes how venture capital generally conducts due diligence on invested companies. In the first step, the venture capital company must first collect basic information about potential investee companies, including business plans, the company's financial information over the past few years, product sales and service information, as well as the company's various qualifications, trademarks and intellectual property information, etc. The second step is to conduct interviews with the company's senior executives and heads of major departments. Through contact, in addition to understanding the ideological status and coordination ability of the management team, as well as their knowledge background and way of doing things, what is particularly important is their thinking mode. and ambition, or it is to understand the current situation and development direction of the enterprise, try to master first-hand information, and analyze the potential problems of the enterprise. The third step is to conduct an independent background investigation, including understanding the business status of the company from its customers, raw material suppliers, and industry associations, and using the Internet to enter the local industrial and commercial bureau, tax bureau, bank, labor department, and social security Departments and others understand the company’s equity changes, history, tax status and credit status, etc. Specifically, for venture capital companies, due diligence includes the following four aspects: 1. The past and present of the company. The focus here is to verify whether the information and data provided by the company are true, as well as the company's past and present business model, products and services, sales network and internal management. 2. The future of the enterprise. Including the market development space of the industry, whether it is a rising industry, the competition situation of the market, and the company's future market competitive position and market share, which involves the adjustment of the company's future business model. Improvement of R&D capabilities and brand promotion. In general, it is how strong the company's sustainable development capabilities are. 3. How are the people in the company like? in China. The human factor always comes first. The first is whether the business owner has a big vision, sees far-sightedly, has organizational and management skills, and can form the core of leadership. More importantly, what is the moral character of the business owner? Does he abide by contracts, keep promises, and treat investors and investors correctly? interests of small shareholders. In-depth due diligence can provide insight into this aspect. Another issue is the situation of the entire senior management team, whether it is complementary and working together. Whether internal control, process management, job responsibilities, incentive mechanisms, etc. are in place. 4. The legal environment of the enterprise. Whether the company's history and equity structure are clear, whether there is actual investment, whether the registered capital is in place, whether there are any intellectual property disputes; taxation situation, whether there is tax evasion, environmental protection and labor relations, and whether there have been any administrative penalties. In addition, whether the actual controller of the company has any legal disputes, bank debts, etc. The last thing investors want to see is to enter a company with legal disputes. Legal stains will restrict this company's future application for listing. If a venture capital company mainly invests in pre-IPO projects, the focus of due diligence must be based on the listing conditions of the company in the capital market. Then you should be very clear about which aspects the IPO review committee focuses on when reviewing corporate listings, which flaws have little impact, and which problems are flaws that must be resolved or even abandoned. Due diligence is to be good at discovering problems and seeing the essence through phenomena. Due diligence is the prerequisite for investment decision-making and an important part of the investment process. If it is not done well, the investment will fail.