SGARIEI

Technical Survey to develop a Startup Investment company.

  • A technical due diligence for a startup investment firm is an in-depth audit process designed to assess the viability, scalability, security, and quality of a startup's technology and engineering team before injecting capital.

  • The main objective is not just to find flaws, but to validate that the technology is a solid asset that can support the projected growth of the business.

  • Here we explain in detail what this process involves:
  • 1. Software Architecture and Scalability Assessment.

  • The investment team is examining whether the technology product can handle a significant increase in users (10x or 100x) without collapsing.

  • • Architecture: Is it scalable, modern, and modular?
  • • Technical Debt: Are there "shortcuts" in the code that will hinder future development or make the product unstable?
  • • Infrastructure: Evaluation of servers (AWS, Azure, GCP), database management and deployment tools (DevOps).
  • 2. Code Quality and Security Review.

  • The maturity of the development is assessed to predict maintenance costs and safety risks.

  • • Quality: Is the code well documented, clean, and maintainable?
  • • Security: Does the startup follow good cybersecurity, encryption and data protection practices (GDPR, local regulations)?
  • 3. Intellectual Property (IP) and Technical Compliance.

  • It is essential to verify that the startup owns its technology.

  • • Copyright: Was the code developed internally or by external contractors without assignment of rights?
  • • Open source: Are open source licenses being used that could commercially restrict the product?
  • 4. Engineering Team Evaluation.

  • The technical team's ability to execute the company's vision is analyzed.

  • • Structure and talent: Do they have the right profiles? Are they dependent on a single person?
  • • Development processes: Do you use agile methodologies? How do you manage errors and the deployment of new versions?
  • 5. Validation of the Minimum Viable Product (MVP) and Traction.

  • The technical assessment verifies that the current technology supports the business metrics presented by the startup.

  • • Technical metrics: Loading times, error rate (uptime), and ease of integration.
  • Key difference: Technical vs. Financial.

  • While financial due diligence looks at accounting books and revenue projections, the technical survey ensures that the engine (the technology) works and won't break down when accelerating (investing capital).

  • Why is it crucial? More than 60% of executives cite poor due diligence as the main cause of deal failure.


  • DATA:
  • DATA FOR CREATION:

  • Creating a startup investment company (Venture Capital Fund) requires a rigorous collection of financial, legal, and strategic data to generate trust in both investors (Limited Partners - LPs) and the startups to be invested in.

  • Here are the key data to collect, divided by areas:
  • 1. Strategic Data and Investment Thesis.
  • • Investment Thesis: Define the geographic focus (e.g., Latin America), sector (e.g., Fintech, SaaS) and stage (Pre-seed, Seed, Series A).
  • • Fund Size: Define the total amount to be raised (e.g., 5, 10, 20 million dollars).
  • • Track Record: If you have invested before as an Angel, compile your past investments, returns, and startup successes.
  • • Competitive Advantage (Deal Flow): How you will get the best startups (network of contacts, alliances with accelerators).
  • 2. Legal Information and Corporate Structure.
  • Corporate Vehicle: Generally, a SAPI (Investment Promotion Corporation) is used in Mexico, with shares of type A (managers) and B (investors).
  • • Company Statutes: Draft the articles of incorporation with the rules for separation or exclusion of partners.
  • • Regulatory Compliance: Ensure compliance with local financial regulations (CNBV in Mexico).
  • • Trademark Registration: Licenses, patents and intellectual property of the investment firm.
  • 3. Financial and Operational Data.
  • • Management Fees Structure: Define the annual percentage for operating the fund (commonly 2% of capital) and the performance fee (carried interest, commonly 20% of earnings).
  • • Financial Projections: Operating expense models, cash flow and payback periods.
  • • Exit Strategy: How you plan to sell shares of startups (acquisitions, IPOs) to provide liquidity to investors.
  • • Reinvestment Policy: Define whether capital will be reserved for follow-on rounds.
  • 4. Team and Governance Data.
  • • Investment Committee: Identify the experts who will decide on investments.
  • • Strategic Alliances: Data on mentors, legal and accounting advisors specializing in VC.
  • 5. Data for "Due Diligence" (Startups to Invest In).
  • • Cap Table (Capitalization Table): Current ownership structure of the startup.
  • • Key Metrics: Monthly Recurring Revenue (MRR), Customer Acquisition Cost (CAC), Lifetime Value (LTV), growth rate.
  • • Legal Documents: Articles of Incorporation, Intellectual Property Contracts, Shareholders' Agreements (SAFE, Convertible Notes).
  • Recommended initial steps:
  • 1. Start as an angel investor or in a syndicate to build a track record.
  • 2. Identify the investor profile (core, wealth investors).
  • 3. Incorporate the company with the help of a notary.
  • 4. Opening a business bank account.

  • DATA FOR ADMINISTRATION:

  • Managing a startup investment firm (Venture Capital, Angel Group, or Family Office) requires rigorous data collection for both pre-investment due diligence and post-investment portfolio monitoring.

  • The key data is divided into four main areas:
  • 1. Financial Data and Growth Metrics (Traction).

  • They are crucial for assessing the feasibility and rate of capital consumption.

  • • Revenue Metrics: Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), and monthly growth rate (ideally >25% initially).
  • • Unit Economics: Customer Acquisition Cost (CAC), Customer Lifetime Value (CLTV), Gross Margin.
  • • Financial Health: Burn Rate (how quickly they spend cash), Cash Runway (how many months of life they have left), Income Statement (P&L), Balance Sheet and 3-5 year cash flow projections.
  • • Cap Table (Capitalization Table): Detailed shareholding structure, including founders, previous investors, convertible notes and option pool (ESOP).
  • 2. Market, Product and Legal Data (Due Diligence).

  • Information to confirm market potential and mitigate legal risks.

  • • Market: Total Addressable Market Size (TAM), Serviceable Obtainable Market (SOM), competitive analysis and industry trends.
  • • Product/Technology: Product roadmap, intellectual property (patents, trademarks, registrations) and technical debt.
  • • Legal: Articles of incorporation, bylaws, contracts with key clients, employment contracts and ownership structure.
  • 3. Equipment and Operations Data (Qualitative Data).
  • • Team: Founders' bios, previous experience, roles and dedication (full-time/part-time).
  • • Operations: Customer feedback, engagement/retention KPIs, milestones achieved vs. planned.
  • 4. Portfolio Management (Internal).

  • Data to manage your own investment company.

  • • Investment Pipeline: Startups under evaluation, stage (seed, pre-seed), negotiation status.
  • • Valuation: Pre-money and Post-money valuation of each round.
  • • Exit Strategies: Return projections, potential acquirers, or plans for future rounds.

  • Recommendation: Use a Virtual Data Room (such as DocSend or Notion) to organize all this information and ensure it is up-to-date, which is essential for efficient due diligence.


  • Additional Requirements:
  • List of processes.
  • List of procedures.
  • List of machinery.
  • List of machines.
  • List of systems.
  • List of departments.
  • List of personnel.
  • Customer list.
  • List of roles.
  • List of production lines.
  • List of production plans.
  • List of main faults.
  • List of current problems.
  • List of losses.
  • List of kpi's main departments.
Money transfers.
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