# How to conduct a first-pass project due diligence

> Learn how to scope a project review, check evidence, identify open questions and write a transparent first-pass due diligence memo.

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Prepared for Orbitrum Academy

Published: 2026-10-08

Source-based educational synthesis prepared with AI assistance. Proposed worksheets and fictional examples are labelled. No named expert review is claimed.

Educational material, not personalized investment, legal, tax or safety advice. Research access on Orbitrum depends on the expert's offer.

A first-pass project due diligence is a structured review of the claims, evidence and uncertainties that matter to a defined research question. Its output is a documented view of what is supported, what remains unresolved and what to investigate next. It is not a guarantee that a project is sound or an investment will succeed.

## What this guide covers

Use this guide to organize an initial review of a company or technology project. It is written for experts explaining their reasoning and readers examining an assessment. A company, a listed security and a token are different objects: begin by naming the object you are actually researching.

The EIC Fund's December 2023 investment guidelines examine management and governance, financing and capital structure, strategy, competition, market conditions, value creation and legal context. They distinguish financial/commercial review from additional technology due diligence. That is a useful institutional example of separating research questions, not a universal checklist imposed on every investor. [EIC Fund, section 2.8](#source-eic-2023)

The workflow below is an Orbitrum educational adaptation of the cited sources. It is not the EIC's process, a regulated opinion or Orbitrum's scoring formula.

## 1. Define the research question before collecting material

Write a short scope statement: the named entity, the claim under examination, the relevant period and the decision the research will inform. For example: "Does the evidence supplied support the claim that this product is ready for a paid pilot in the stated environment?"

That question is narrower than "Is this a good company?" It makes it possible to identify evidence that would change the conclusion. Keep product readiness, commercial adoption and investment valuation as separate questions; a positive answer to one does not logically answer the others.

Add exclusions. An initial public-source review may not cover ownership verification, contractual rights, regulatory permissions or confidential financial records. An exclusion is a boundary of the work, not an assertion that the issue is unimportant.

## 2. Record claims and evidence separately

Create an evidence register. Keep the statement you are testing in one column and the supporting material in another. Do not silently turn a company's description into an independently established fact.

| Field | What to record |
|---|---|
| Claim | A precise statement that could be supported or challenged |
| Source | Document title, publisher, URL or authorized file reference |
| Timing | Publication date, period covered and date accessed |
| Evidence | The relevant passage, result or calculation |
| Interpretation | What you think follows from that evidence |
| Limit | What the source cannot establish |
| Next question | A specific missing item or follow-up |

This table is a note-taking template, not a certified due-diligence standard. Its purpose is to make the transition from source to conclusion inspectable.

## 3. Look for a result that could challenge the thesis

Camuffo and colleagues' 2024 study involved 759 firms in four randomized trials. It examined teaching entrepreneurs to formulate and test hypotheses. The reported findings concern idea termination and patterns of strategic change; they do not establish that a checklist produces superior investment returns. [Camuffo et al., 2024](#source-camuffo-2024)

Apply the underlying question-testing discipline to your notes. Before reviewing the next document, write what result would weaken your current view. A claim that cannot be weakened by any possible evidence is not a useful research question.

For a pilot claim, a contrary result might be that performance was measured only in a controlled demonstration rather than the proposed customer's environment. The appropriate response is to narrow the conclusion, not to hide the inconvenient qualification.

## 4. Separate the work into review areas

Use the following working questions to avoid collapsing different issues into a single impression. They adapt the EIC's dimensions into an initial research plan. [EIC Fund, section 2.8](#source-eic-2023)

| Area | Initial research question |
|---|---|
| Team and governance | Who is responsible for delivery and decision-making? |
| Product and technology | What has been demonstrated, under which conditions? |
| Customers and market | What evidence supports the stated customer need? |
| Commercial model | What is sold, to whom, and under what arrangement? |
| Financing | Which resources and commitments are documented? |
| Competition | What alternatives does the intended customer have? |
| Legal and ownership context | Which rights and permissions require specialist verification? |

Do not make a public-source memo look like a completed legal or financial audit. Record "not established from the material reviewed" when that is the honest result.

## 5. Write a conclusion with boundaries

Use four short paragraphs: the question; the strongest evidence; the most important unresolved issue; and the next research step. State whether you support the original claim, support a narrower claim or cannot reach a conclusion.

Here is a hypothetical example, not a finding about an Orbitrum project:

> The supplied material supports successful completion of the stated task in the demonstration setting. It does not establish performance across customer sites. A supervised pilot with documented failures and intervention time would address that gap. This conclusion concerns deployment evidence, not the attractiveness of an investment.

Notice that the memo can be useful without a numerical rating. If a rating is used, explain what it measures and how missing information affected it.

## 6. Keep research conclusions separate from an investment decision

The SEC warns that US private placements can involve total loss, restricted resale and limited disclosure. These risks are not removed by completing a research worksheet. The bulletin concerns US securities; requirements elsewhere differ. [SEC investor bulletin, updated 2026](#source-sec-private)

An assessment of a project is not a substitute for examining the specific instrument, price, contractual rights or personal suitability. Seek qualified assistance for the parts of a decision that require financial, legal or specialist judgment.

## A short memo you can reuse

Write the following in your own research document:

- **Object and question:** What exactly did I assess?
- **Evidence reviewed:** Which dated sources support the important claims?
- **Conclusion:** What follows from those sources, and with what limits?
- **Open questions:** What remains unknown or disputed?
- **Next step:** Which evidence would most improve the assessment?
- **Attribution:** Who prepared the view, and are relevant interests disclosed?

This is a suggested writing structure, not a new feature that Orbitrum automatically generates or stores.

## Apply this to research on Orbitrum

Open a public project profile and follow the available links to its sources and authors. Use this worksheet alongside the research you can access. Full-content availability depends on the author's offer; a public preview does not establish that every due-diligence area has been examined.

Continue with [technical evidence](/academy/technical-analysis/demo-vs-deployable-product/) and [commercial traction](/academy/commercial-analysis/startup-traction-evidence/), or [browse projects](/).

## Questions about first-pass due diligence

### Is first-pass due diligence a full audit?

No. In this Academy, it means an initial, explicitly scoped review. Its limitations and unanswered questions should be visible. Specialist legal, accounting or technical work may still be needed.

### How many sources are enough?

There is no source-count threshold in this guide. The question is whether the material supports the particular conclusion and whether important gaps remain. Several summaries repeating one announcement are still dependent on that announcement.

### Does a high project score prove that an investment is safe?

No. Read what the score measures, who produced it, when it was produced and the accompanying reasoning. A score does not by itself establish an investment's price, rights, liquidity or suitability.

## Explore the research on Orbitrum

Browse public project profiles and the research available from their authors. Public previews are free; full research access depends on the expert's offer.

- [Explore projects](https://orbitrum.io/)
- [Discover experts](https://orbitrum.io/?mode=experts)
- [Browse sectors](https://orbitrum.io/sectors/)

## Sources and reading notes

<a id="source-eic-2023"></a>
### EIC Fund Investment Guidelines, Horizon Europe Compartment

Publisher/authors: European Innovation Council
Date: December 2023
Type: Official investment-process guidance
Locator: Section 2.8, especially 2.8.5-2.8.7; printed p.18 (PDF page 18)
Official source: https://eic.ec.europa.eu/document/download/f2d3a62e-76c7-45ef-a6a8-39bb67a5774a_en

Supports: Financial/commercial due-diligence dimensions and the distinction from additional technology due diligence.
Scope and limitations: The EIC Fund mandate is not a universal investor checklist. No evidence that following this Academy guarantees investment performance. The downloaded cover identifies December 2023; an old query-string filename misleadingly says March 2022.
Sources checked: 2026-10-08

<a id="source-camuffo-2024"></a>
### A scientific approach to entrepreneurial decision-making: Large-scale replication and extension

Publisher/authors: Camuffo, Gambardella, Messinese, Novelli, Paolucci and Spina; Strategic Management Journal 45, 1209-1237
Date: 2024
Type: Peer-reviewed study; four randomized controlled trials, 759 firms
Locator: Abstract; sections 4 and 5.5; discussion
Official source: https://sms.onlinelibrary.wiley.com/doi/pdf/10.1002/smj.3580
DOI: 10.1002/smj.3580

Supports: Hypothesis-driven entrepreneurial learning; effects on idea termination and patterns of strategic pivots.
Scope and limitations: Not a trial of investor returns or a proof that a single traction metric predicts success; do not assert guaranteed revenue or funding improvements.
Sources checked: 2026-10-08

<a id="source-sec-private"></a>
### Private Placements under Regulation D - Updated Investor Bulletin

Publisher/authors: SEC / Investor.gov
Date: 2022; updated September 21, 2026
Type: Official investor-education bulletin
Locator: Important risk considerations and information available to investors
Official source: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/private-placements-under-regulation-d-updated-investor-bulletin

Supports: Risk of total loss, illiquidity, and differences in disclosure in US private placements.
Scope and limitations: US context only; do not generalize eligibility rules, solicitation rules or specific exemptions to other jurisdictions.
Sources checked: 2026-10-08

## Continue learning

- [How to distinguish a demo from a deployable product](https://orbitrum.io/academy/technical-analysis/demo-vs-deployable-product/)
- [How to examine a startup's traction evidence](https://orbitrum.io/academy/commercial-analysis/startup-traction-evidence/)
- [How to interpret disagreement between experts](https://orbitrum.io/academy/critical-reading/interpreting-expert-disagreement/)