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How to Evaluate Deal Information and Documents

Overview​

Thoroughly evaluating deal information and documents is crucial for making informed investment decisions on the WhiteLabel Community Deals Platform. This guide will help you navigate the detailed information provided for each deal, understand how to analyze key documents, and identify important factors to consider before investing. Proper due diligence can help you assess the potential risks and rewards of each investment opportunity.

Prerequisites​

Before evaluating deal information and documents, you should:

  • Have a registered and verified account on the platform
  • Have completed KYC verification
  • Have identified a deal you're interested in
  • Have a basic understanding of investment concepts and terminology
  • Be prepared to spend time reviewing detailed information

Step-by-Step Instructions​

Step 1: Access the Deal Details Page​

  1. Log in to your account on the platform
  2. Navigate to the "Deals" section in the main navigation menu
  3. Browse available deals and click on a specific deal that interests you
  4. This will take you to the detailed deal page with comprehensive information

Step 2: Review the Deal Overview and Progress​

  1. At the top of the deal page, examine the key information:

    • Deal title and issuer name
    • Pool progress (amount raised and percentage complete)
    • Target fundraising amount
    • Number of participants
    • Investment period status and closing date
    • Minimum investment amount

  2. This information gives you a quick snapshot of the deal's popularity and timeline

Step 3: Analyze the Investment Terms​

  1. In the investment terms section, carefully review:

    • Pooled amount vs. target amount
    • Investment limits (minimum and maximum)
    • Network/blockchain being used
    • Token price and expected returns (if specified)
    • Any vesting or lockup periods
    • Platform fees

  2. Pay special attention to the minimum investment requirement to ensure it fits your budget

Step 4: Study the Deal Description and Business Model​

  1. Read the "Memo" or "Overview" section thoroughly, which typically includes:

    • Deal title and seed round information
    • Detailed business description
    • Problem the business is solving
    • Solution and technology approach
    • Revenue model and monetization strategy
    • Market opportunity and competitive landscape

  2. Look for clear explanations of how the business plans to generate revenue and grow

Step 5: Evaluate the Team and Issuer Information​

  1. Review the issuer information section:

    • Company or project name
    • Legal entity details
    • Team members and their backgrounds
    • Previous experience and track record
    • Website and social media links (if available)

  2. Research the team members outside the platform if possible to verify their credentials and experience

Step 6: Access and Download Deal Documents​

  1. Navigate to the "Documents & Presentations" section

  2. Click on the "Deal Docs" tab to see all available documents

  3. You'll typically find several types of documents:

    • Offering Memorandum/Private Placement Memorandum (PPM)
    • Subscription Agreement
    • Pitch Deck
    • Technical whitepaper (for tech projects)
    • Financial projections
    • Legal agreements

  4. Click on each document to view or download it for detailed review

Step 7: Review the Offering Memorandum in Detail​

  1. The Offering Memorandum (sometimes called PPM) is one of the most important documents to review

  2. Pay special attention to these sections:

    • Executive Summary: Overview of the investment opportunity
    • Business Description: Detailed explanation of the business model
    • Market Analysis: Information about the target market and competition
    • Risk Factors: Disclosure of potential risks to investors
    • Use of Proceeds: How the raised funds will be used
    • Financial Information: Historical financials and projections
    • Management: Team backgrounds and experience
    • Terms of the Offering: Detailed investment terms

  3. Take notes on any questions or concerns that arise during your review

Step 8: Analyze the Pitch Deck​

  1. The pitch deck typically provides a more visual and concise overview of the opportunity

  2. Look for key information such as:

    • The problem and solution
    • Market size and opportunity
    • Competitive advantages
    • Business model and revenue streams
    • Traction and milestones achieved
    • Team backgrounds
    • Funding needs and use of funds
    • Growth projections

  3. Compare the information in the pitch deck with the offering memorandum for consistency

Step 9: Examine the Subscription Agreement​

  1. The Subscription Agreement outlines the legal terms of your investment

  2. Review these key elements:

    • Purchase price and number of tokens/shares
    • Investor representations and warranties
    • Transfer restrictions
    • Rights and obligations of investors
    • Governing law and dispute resolution
    • Termination and cancellation rights

  3. Consider consulting with a legal professional if you're unsure about any terms

Step 10: Evaluate Financial Projections and Models​

  1. If financial projections are provided, analyze them critically:

    • Review revenue growth assumptions for reasonableness
    • Check expense projections and profit margins
    • Look at cash flow forecasts and capital requirements
    • Understand the timeline to profitability
    • Identify key financial risks

  2. Be skeptical of overly optimistic projections without supporting evidence

Step 11: Understand Token Mechanics (for Token Offerings)​

  1. For token-based deals, review the token mechanics:

    • Token utility and purpose
    • Total supply and distribution
    • Token economics and incentive structure
    • Vesting schedules and lockup periods
    • Blockchain network and technical implementation
    • Smart contract details and security audits (if available)

  2. Check if the token address is provided and verify it on the blockchain explorer

Step 12: Research External Information​

  1. Supplement the platform-provided information with external research:

    • Search for news articles about the company or project
    • Check the company's website and social media presence
    • Look for reviews or discussions in relevant forums
    • Research the industry and market trends
    • Check competitors and their positioning

  2. This external validation can provide additional context for your evaluation

Step 13: Identify and Assess Risk Factors​

  1. Carefully review the risk factors section in the offering documents

  2. Common risks to evaluate include:

    • Market risks: Competition, market size, adoption challenges
    • Operational risks: Team experience, execution capability
    • Financial risks: Funding needs, burn rate, path to profitability
    • Regulatory risks: Compliance with applicable laws
    • Technology risks: Technical feasibility, security concerns
    • Exit risks: Liquidity options, potential return scenarios

  3. Consider how these risks align with your risk tolerance and investment goals

Step 14: Prepare Questions for the Issuer​

  1. Based on your review, compile a list of questions or concerns

  2. If the platform offers a way to communicate with issuers:

    • Use the Q&A or comments section to ask your questions
    • Be specific and reference the relevant documents
    • Ask for clarification on any inconsistencies or vague information

  3. Wait for responses before making your investment decision

Step 15: Make Your Investment Decision​

  1. After thorough evaluation, decide whether to:

    • Proceed with the investment
    • Request more information before deciding
    • Pass on this opportunity

  2. If proceeding, determine how much to invest based on:

    • Your overall investment strategy
    • Portfolio diversification goals
    • Risk assessment of this specific deal
    • Minimum and maximum investment limits

Best Practices​

  • Read Everything: Don't skip any documents, even if they seem lengthy or technical
  • Compare Information: Cross-check information across different documents for consistency
  • Take Notes: Document key points, questions, and concerns as you review
  • Be Skeptical: Approach projections and claims with healthy skepticism
  • Research the Team: The team's experience and track record are often critical success factors
  • Understand the Market: Research the industry and market to validate the opportunity
  • Consider Timing: Evaluate if the market timing is right for this particular business
  • Assess Competition: Understand the competitive landscape and the deal's unique advantages
  • Evaluate Exit Potential: Consider how and when you might realize returns on your investment
  • Consult Experts: For large investments, consider getting advice from financial or legal professionals

Troubleshooting​

Common Issues​

  1. Missing or Incomplete Documents

    • Solution: Contact platform support to request the missing information
    • Solution: Ask the issuer directly through the platform's communication channels
    • Solution: Consider whether the lack of information is itself a red flag

  2. Technical Terms or Jargon

    • Solution: Look up unfamiliar terms in investment glossaries or online resources
    • Solution: Ask for clarification from the issuer or platform support
    • Solution: Consult with someone more experienced in the specific industry

  3. Inconsistencies Between Documents

    • Solution: Note the specific inconsistencies and ask the issuer for clarification
    • Solution: Consider which source is likely to be more accurate or up-to-date
    • Solution: Evaluate whether the inconsistencies affect your investment decision

  4. Difficulty Assessing Valuation

    • Solution: Research comparable companies or projects for benchmarking
    • Solution: Look for justification of the valuation in the offering documents
    • Solution: Consider consulting with a financial advisor for complex valuations

  5. Unclear Use of Funds

    • Solution: Request a more detailed breakdown of how funds will be allocated
    • Solution: Compare the use of funds with the business plan and growth strategy
    • Solution: Evaluate whether the funding amount aligns with the stated objectives

Getting Help​

If you encounter any issues while evaluating deal information and documents:

  1. Navigate to the /support Support center by clicking on the "Support" link in the main navigation
  2. Select the appropriate category for your issue
  3. Provide specific details about your question or concern
  4. Submit your support request
  5. Support staff will respond through the platform's notification system