The 5-Minute Review described earlier was only designed to be a quick-and-dirty analysis of a company for an initial decision to accept the company for further analysis or to reject the company. This section on in-depth analysis, which is shown in the Venture Capital Investment Process Chart, provides a more thorough review of the company.
It is important to keep in mind that you can do all of the analysis in the world – spending hours, days, or even months analyzing a company – but at the end of the day, you have to make a decision on whether to invest in or reject the company. Furthermore, you are dealing with a vast amount of uncertainty (see my Forbes article, Understand Reversion To The Mean To Make Better Decisions In Business, Investments And Life, for a discussion of complex, adaptive systems) and with little prior performance on which to base your decision. So while your in-depth analysis should be as complete as possible, you have to recognize that at some point you will have to conclude your analysis and make a decision. My forthcoming book, The Intrinsic Value Wealth Report Pocket Guide to Venture Capital Investing, will have checklists and other material that will help in this decision process. The next section in the dropdown menus is the Venture Selection Decision Table, which should also prove helpful in summarizing and concluding your analysis – with a decision to accept or reject being the end result.
Some of the topics that will be covered in the book, The Intrinsic Value Wealth Report Pocket Guide to Venture Capital Investing , when it is published are: the use of business planning software to “reverse engineer” the analysis process; the Altman Z Score bankruptcy model; Porter’s 5 Forces model; SWOT analysis; PESTEL analysis; and many more.