when considering investing in a startup some of the 10 steps above are appropriate while others just aren t possible because the company doesn t have the track record here are some startup specific moves 
m a due diligencein the mergers and acquisitions m a world a company that is considering a deal will perform a financial analysis on a target company the due diligence might also include an analysis of future growth the acquirer may ask questions that address the structuring of the acquisition the acquirer is also likely to look at the current practices and policies of the target company and perform a shareholder value analysis in traditional m a activity the acquiring firm deploys risk analysts who perform due diligence by studying costs benefits structures assets and liabilities that s known colloquially as hard due diligence increasingly however m a deals are also subject to the study of a company s culture management and other human elements via soft due diligence in an m a deal hard due diligence is the battlefield of lawyers accountants and negotiators typically hard due diligence focuses on earnings before interest taxes depreciation and amortization ebitda the aging of receivables and payables cash flow and capital expenditures in sectors such as technology or manufacturing additional focus is placed on intellectual property and physical capital other examples of hard due diligence activities include conducting soft due diligence is not an exact science it should focus on how well a targeted workforce will mesh with the acquiring corporation s culture hard and soft due diligence intertwine when it comes to compensation and incentive programs these programs are not only based on real numbers making them easy to incorporate into post acquisition planning but they can also be discussed with employees and used to gauge cultural impact soft due diligence is concerned with employee motivation and compensation packages are specifically constructed to boost those motivations it is not a panacea or a cure all but soft due diligence can help the acquiring firm predict whether a compensation program can be implemented to improve the success of a deal soft due diligence can also concern itself with the target company s customers even if the target employees accept the cultural and operational shifts from the takeover the target customers and clients may well resent a change in service products or procedures this is why many m a analyses now include customer reviews supplier reviews and test market data 