For Deep Due Diligence, Minimize Disruption to Maximize Success

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How to Survive a Due Diligence Process

As a startup founder, navigating a due diligence process can be a daunting task. It’s essential to approach this process with caution and strategy to avoid wasting time and resources. In this article, we’ll provide you with valuable insights on how to survive a due diligence process.

1. Don’t Put All Your Eggs in One Basket

Even when you have exclusivity with an investor, it’s crucial to maintain options with funding. Deals can fall through during deep diligence, leaving your team exhausted and morale low. Having a plan B is essential to avoid this scenario.

2. Keep the Feedback Loop Going

A good due diligence adviser can produce a report in two-to-three weeks if pushed. To ensure progress, stay on top of your deal person by checking in every few days for feedback and timelines of next steps.

3. Control the Narrative

Control the narrative by addressing potential issues early on. Don’t let things go off the boil, and keep building relationships with investors through regular meetings and discussions.

4. Stay Vigilant

Be cautious when dealing with investors who don’t challenge you or show genuine interest in your business. A lack of engagement or commitment is a red flag.

5. Maintain Options

Keep other investors engaged while navigating the due diligence process. This will help maintain flexibility and avoid disruptions to your team’s time and business priorities.

6. Approach with Caution

Fundraising can be unpredictable, so approach each deal with a healthy dose of caution. Protect your team’s time and business priorities by being vigilant and proactive.

By following these tips, you’ll increase your chances of surviving the due diligence process successfully. Remember to stay focused on maintaining options, controlling the narrative, and staying vigilant throughout the process.

Related Topics

• Column: Due Diligence
• How To: Fundraising
• Venture Capital
• Startups