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Jargon Buster

Professor Russell Smith
Monday 12 April 2010 10:47 BST
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Due Diligence

The process whereby a potential investor undertakes detailed investigations to check that what you say about your business is true. Investors (or their appointed advisers) often look to verify material facts (eg scientific evidence, market research and financial details) that you have stated in your business or financial plan prior to making any investment in your business. Remember that your business plans should be considered as a “contract” with an investor and so information that it includes must be accurate.

Non-executive director

An experienced person who joins the board of a company to provide expertise and guidance to a business. Non-executive directors may not be “9-5” employees of the business and so don’t have the same day-to-day management responsibilities as full-time executive directors. They’re usually paid fees for their services and will have an agreement with the company outlining their terms of contract. They’re often invited to join the board to provide advice in specific aspects of the business eg raising finance.

QUESTIONS PLEASE

Send your questions to Professor Smith at independent@businessboffins.com. Selected questions will be answered each month. Answers are for the general guidance of ownermanagers only. Always seek professional advice. Professor Smith is the founder of Business Boffins Ltd which, in collaboration with Oxford Brookes University, Anglia Ruskin University, Warwick University and University of the West of England, delivers support programmes to small businesses nationwide. Readers of The Independent andThe Independent on Sunday can enrol on the programme at a discounted rate. See businessboffins.com

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