Startup Professionals Musings

OCTOBER 6, 2023

This is the mysterious and dreaded due diligence process, which can kill the whole deal. Some entrepreneurs do very little to prepare for due diligence, assuming all the talking has already been done, and the business plan and results to-date tell the right story. My best advice is to stick to the middle ground.

Technical Review 296

Technical Review Due Diligence Term Sheet Bankruptcy 296

Startup Professionals Musings

APRIL 18, 2021

If your startup is great enough to get a term sheet from angel investors or a venture capitalist, the next step for the investor is to complete the dreaded due diligence process. Some startups do nothing to prepare for the due diligence process, assuming the people and business plan documents will speak for themselves.

Technical Review 380

Technical Review Due Diligence Term Sheet Angel Investor 380

Startup Professionals Musings

FEBRUARY 10, 2023

Struggling entrepreneurs are often so happy to get a funding offer that they neglect the recommended reverse due diligence on the investors. Investor due diligence on a startup is not a mysterious black art, but is nothing more than a final integrity check on all aspects of your business model, team, product, customers, and plan.

Technical Review 345

Technical Review Due Diligence Term Sheet Offshore 345

Startup Professionals Musings

JANUARY 30, 2023

When you do find potential investors, be sure to take the time to do reverse due diligence on them, as they are doing due diligence on you and your team. I find too many entrepreneurs are surprised later by onerous investor expectations and hidden terms. Chasing and capitalizing on luck brings resilience.

Technical Review 373

Technical Review Software Review Due Diligence Entrepreneur 373

Startup Professionals Musings

MAY 11, 2020

Struggling entrepreneurs are often so happy to get a funding offer that they neglect the recommended reverse due diligence on the investors. Investor due diligence on a startup is not a mysterious black art, but is nothing more than a final integrity check on all aspects of your business model, team, product, customers, and plan.

Technical Review 310

Technical Review Due Diligence Term Sheet Offshore 310

Both Sides of the Table

OCTOBER 30, 2014

I seldom hire patent attorneys during due diligence but this was too important. She connected me with Andreessen’s due diligence team who were surprisingly open with all the technical analysis they had done. Did anybody hold patents that would prevent us from using this technology? We hired OSHA regulatory lawyers.

Technical Review 418

Technical Review Software Review Due Diligence CTO Hire 418

Startup Professionals Musings

MAY 22, 2020

These questions are the key ones in every due diligence effort, always done by accredited investors, but almost never done by key employees and new partners. Look for examples of similar companies and revenue multiples achieved from acquirers. Calculate employee stock option values and vesting times, as well as salary.

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

Startup Professionals Musings

SEPTEMBER 10, 2014

Struggling entrepreneurs are often so happy to get a funding offer that they neglect the recommended reverse due diligence on the investors. Investor due diligence on a startup is not a mysterious black art, but is nothing more than a final integrity check on all aspects of your business model, team, product, customers, and plan.

Technical Review 257

Technical Review Due Diligence Term Sheet Offshore 257

Startup Professionals Musings

APRIL 17, 2022

Thus you should do the same or more due diligence on educational background, previous work, and references. Ethics and the view of personal boundaries should be explored fully. Carry minimal historical baggage. Partner decisions are more important than team member hiring decisions.

Partner 385

Partner Software Review CTO Hire Cofounder 385

Startup Professionals Musings

MARCH 10, 2021

Failure to prepare for due diligence. Not doing due diligence on the funding source. You need to complete due diligence on your prospective funders as they complete due diligence on you. Then you have to have evidence to support your request.

Software Review 307

Software Review Due Diligence Elevator Pitch Early Stage 307

View from Seed

APRIL 14, 2020

This led to a number of repercussions that most VC’s have lamented during this time, including higher prices, larger rounds, shoddy due diligence, and many companies raising large sums of venture capital that probably aren’t suited to VC funding.

Early Stage 374

Early Stage Software Review Technical Review Due Diligence 374

Startup Professionals Musings

NOVEMBER 17, 2013

Failure to prepare for due diligence. Not doing due diligence on the funding source. You need to complete due diligence on your prospective funders as they complete due diligence on you. Then you have to have evidence to support your request.

Software Review 265

Software Review Due Diligence Elevator Pitch Startup 265

YoungUpstarts

SEPTEMBER 30, 2020

That should involve hiring dedicated staff to manage vendor risks, perform due diligence when taking on new vendors, document the vendor relationship, and even put together the necessary contractual language to, for example, obtain a certain level of data security, or put other measures in place to mitigate risk.

Software Review 264

Software Review Technical Review Due Diligence Management 264

Startup Professionals Musings

MAY 13, 2023

Some analysis and due diligence along the following lines should be performed on every idea, as a reality check, before committing your efforts and other people’s money to building a business: Look for places where competitors are few.

Technical Review 267

Technical Review Due Diligence Intellectual Property Internet 267

Startup Professionals Musings

APRIL 13, 2020

In any case, before you select a specific outsourcing or contract alternative, there is no substitute for doing thorough due diligence. You need to capture the learning in your own team from the evolution. Visit the contract location, investigate their skill level, training, and quality of their facilities.

Intellectual Property 306

Intellectual Property Non-disclosure Agreement Software Review Technical Review 306

Startup Professionals Musings

JULY 12, 2021

I’m sure you have seen many new ones, and now understand even better the due diligence required to validate the opportunity, and the executions steps required to make it happen. Use that same technical and business expertise that served you well on this startup to find the next opportunity. Ignore the voices of dissent again.

Technical Review 417

Technical Review Entrepreneur Due Diligence Institutional Investors 417

Startup Professionals Musings

OCTOBER 14, 2022

In addition to goodwill justified by a great leader and an outstanding team, investors will use their due diligence process to assess the organizational structure and effectiveness as well. The key parameters of this evaluation will always include: Strength of the business culture.

Technical Review 323

Technical Review Due Diligence Valuation Leadership 323

deal architect

AUGUST 9, 2019

It brought back memories - I had taken a client there 15 years ago on a due diligence trip as they looked to. I drove by the Renaissance hotel in Powai on the outskirts of Mumbai in India last month.

Software Review 50

Software Review Due Diligence India Offshore 50

Startup Professionals Musings

FEBRUARY 1, 2021

Potential investors don’t need this data, except perhaps as part of a final due diligence after agreement on terms. Entrepreneurs should never disclose the details of a planned or current patent application to any outsiders, even with a CDA in place. Product details in the public domain can never be patented. Sharing trade secrets.

Non-disclosure Agreement 399

Non-disclosure Agreement Technical Review Due Diligence Angel Investor 399

Startup Professionals Musings

JANUARY 15, 2020

In addition to goodwill justified by a great leader and an outstanding team, investors will use their due diligence process to assess the organizational structure and effectiveness as well. The key parameters of this evaluation will always include: Strength of the business culture.

Valuation 311

Valuation Technical Review Due Diligence Leadership 311

Startup Professionals Musings

APRIL 8, 2012

When it’s time for due diligence, we will talk to your team. Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. Their perception is the only reality.

Technical Review 332

Technical Review Entrepreneur Kentucky Due Diligence 332

Both Sides of the Table

MAY 1, 2014

reviews – every due diligence process should feel like this) to our nascent offering and the dedication and detail orientation of the MakeSpace team. They did customer pickups, the drove vans to storage facilities, the deal with booking and customer support issues – everything. Full on burger flipping mode.

Technical Review 380

Technical Review Software Review Cofounder CTO Hire 380

Startup Professionals Musings

APRIL 22, 2014

Thus you should do the same or more due diligence on educational background, previous work, and references. Ethics and the view of personal boundaries should be explored fully. No historical baggage. Partner decisions are more important than hiring decisions. Look impartially from all angles and do the follow-up.

Partner 269

Partner Software Review CTO Hire Fractional CTO 269

Both Sides of the Table

MAY 24, 2018

Usually after a Monday partner meeting you get a pretty strong: Yes, term sheet coming No, sorry we’re passing Maybe, we need to do more due diligence / analysis / work I always counsel founders that “good news comes early” so if you haven’t heard by Tuesday at noon chances are it wasn’t likely a clean “yes.”

Technical Review 314

Technical Review Due Diligence Partner Term Sheet 314

Startup Professionals Musings

APRIL 25, 2020

When it’s time for due diligence, we will talk to your team. Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. Their perception is the only reality.

Technical Review 308

Technical Review Kentucky Due Diligence Japan 308

Startup Professionals Musings

SEPTEMBER 27, 2014

Some analysis and due diligence along the following lines should be performed on every idea, as a reality check, before committing your efforts and other people’s money to building a business: Look for places where competitors are few.

Technical Review 267

Technical Review Due Diligence Entrepreneur Intellectual Property 267

Startup Professionals Musings

MARCH 12, 2022

In this context, it’s always important to do your own due diligence on every potential investor, and not wait for them to come to you. If you can highlight a clear synergy with an investor interest, where the sum of one plus one equals three or more, then a large goodwill number is likely.

Valuation 368

Valuation Technical Review Due Diligence Angel Investor 368

Startup Professionals Musings

JULY 29, 2020

So what can you do, and what are the “red flags” to look for as you do your due diligence before pooling your money with other investors, or accepting money for your startup from investors? Here are some common sense tips: Get financial statements and verify.

Due Diligence 354

Due Diligence Securities and Exchange Commission Offshore SEC 354

Startup Professionals Musings

AUGUST 8, 2014

In any case, before you select a specific outsourcing or contract alternative, there is no substitute for doing good due diligence. You need to capture the learning in your own team from the evolution. Visit the contract location, investigate their skill level, training, and quality of their facilities.

Intellectual Property 238

Intellectual Property Non-disclosure Agreement Software Review Offshore 238

Both Sides of the Table

SEPTEMBER 15, 2022

I do already see a return of normalcy on the amount of time investors have to conduct due diligence and make sure there is not only a compelling business case but also good chemistry between the founders and investors. We’ll just wait until companies that last raised in 2019 or 2020 come to market.” What is a VC To Do?

Technical Review 416

Technical Review Pre-Money Valuation San Francisco Valuation 416

Startup Professionals Musings

FEBRUARY 27, 2021

Then it’s time for due diligence on the incubators in your area, to see who has the track record and credentials you need. My conclusion is that the best incubators can really help you, but are no shortcut or substitute for the right mindset, hard work, and a real solution to a real problem with a big opportunity. Marty Zwilling.

Incubator 366

Incubator Technical Review Due Diligence Venture Capital 366

Startup Professionals Musings

NOVEMBER 19, 2018

Of course, full trust must be earned, but it is critical to do some due diligence before hiring new team members, or establishing partnerships. After due diligence, the best approach is for you to be vigilant, but explicitly communicate your trust and confidence in their abilities.

Leadership 241

Leadership Technical Review Due Diligence Founder 241

Both Sides of the Table

NOVEMBER 15, 2010

By definition if somebody is investing in you as a dot (limited thought, limited due diligence, maximum price) they are a dot to you, too. I know VCs and sophisticated angels can be difficult, slow and price sensitive, but I also know that in tough times unsophisticated investors can be a right pain in the arse.

Technical Review 411

Technical Review Due Diligence Ireland New York 411

Startup Professionals Musings

FEBRUARY 3, 2023

When it’s time for due diligence, we will talk to your team. Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. Their perception is the only reality.

Technical Review 269

Technical Review Kentucky Due Diligence Japan 269

Both Sides of the Table

DECEMBER 7, 2014

Who else can provide context if your portfolio isn’t growing as quickly as your peer group, if they believe you paid too high a price on a deal, if they question your due diligence in a given situation or whatever critique they might offer?

Software Review 341

Software Review Customer Technical Review LP 341

Both Sides of the Table

MAY 9, 2018

You race back to the office to tell everybody how well it went and you wait for the follow-up call to have a partners’ meeting or talk about term sheets or at least dip into due diligence. What do I do now?

Software Review 381

Software Review Churn Rate Due Diligence New York 381

Startup Professionals Musings

MAY 4, 2013

When it’s time for due diligence, we will talk to your team. Investors (and team members and partners) find that it’s more effective to assess an entrepreneur’s fit to these personal characteristics than it is to assess the real potential of an idea, or the probability of good luck. Their perception is the only reality. Marty Zwilling.

Technical Review 278

Technical Review Entrepreneur Kentucky Due Diligence 278