There are risks associated with investing in emerging companies. The technologies seem disruptive, the markets appear to be immense and the management teams seem invincible. However, not all promising companies are worthy of your hard-earned dollars (or shekels).

Edwin Dorsey, editor of the Bear Cave, does a wonderful job of discussing some of the due diligence that investors should conduct on early-stage companies. Everything from obtaining and understanding customer complaints filed with Attorneys General to deciphering SEC comment letters is explained. Learn how to determine when executive resignations are red flags as well as what the quality of auditing firms and auditing partners portends.

Edwin talks about questionable revenue recognition practices as well as how to access the quality of board members. We discuss what investors should look for in terms of a company’s patents, the turnover of retained law firms and the role of influencers as revenue generators.

Edwin Dorsey is the editor of the Bear Cave and Sunday’s Idea Brunch newsletters. His research is impeccable and his writing is crisp. Edwin’s work is invaluable to the investment community.