SK Associates: End-to-End Due Diligence on a Biodegradable Startup

At SK Associates, Aakash was assigned to conduct a full due diligence on a biodegradable startup that the firm was evaluating for a potential investment match. He ran the process independently, setting up online meetings with the founders and co-founders and working through financial, legal, and operational dimensions in a structured sequence.

On the legal side, Aakash identified an inconsistency in the incorporation documents: a partner listed in the certificate of incorporation did not appear in a more recent filing. When he raised it with the founders, they explained that the co-founder had exited and a university had been added as a share partner in their place. The discrepancy was resolved, but the process of catching and verifying it was a meaningful part of the diligence.

On the financial side, he reviewed the P&L statements, balance sheets, and cash flow statements. He went beyond the headline numbers and verified the financials through notes to accounts, checking whether reported profits were converting into actual cash. His assessment was that the financials were broadly sound and consistent with what the founders had presented.

His final recommendation was to invest. The reasoning was grounded in three factors: the strength of the problem the startup was solving, the integrity of the financials, and the absence of significant legal or operational red flags.