Getting Funded, Step 4: Due Diligence(medium.com)
medium.com
Getting Funded, Step 4: Due Diligence
https://medium.com/getting-funded/getting-funded-step-4-due-diligence-3d2ab36fa187
2 comments
The quantity of diligence is usually proportional to the size of the deal.
Be careful of DD done prior to a term sheet, as it allows the VCs to retain optionality on your company in a way that is pretty cheap for them and very expensive for you. Arranged calls with bizdev and customer prospects from a VC's rolodex looks like progress but doesn't necessarily mean anything.
I'd love to know how people who are good at this qualify VC prospects and decide what kinds of up-front due diligence to acquiesce to.
I'd love to know how people who are good at this qualify VC prospects and decide what kinds of up-front due diligence to acquiesce to.
Is this really a normal amount of information investors request from companies? What's the point of knowing all of this? Asking it implies that #1 the company has all this data in place, otherwise it's wasting time getting it together, #2 the investors know better than the founders about architecture, technology and toolsets and #3 a significant amount of times a term sheet is revoked because of trouble with build tools, standard compliance or a "development methodology". I'm feeling the author just listed everything he could think of rather than everything that actually matters.