Due diligence means something different to everyone. One certain point is that it seldom amounts to handing over a pile of paperwork, although that is often where the process starts. Just remember that the paperwork should be well-organized and flawlessly presented. You control this part of the relationship, both in terms how you shape the answers to key questions, as well as the pace at which you provide information. If the spirit of an ongoing dialogue, you may not want to send “everything” at the same time. Travelling at 35 mph may lead to the same outcome as 70 mph, with fewer missteps.
Securing capital has more to do with communication than documentation. And that is a two-way street. Just as venture capitalists will have questions about your clients and operations, you too should have questions for the venture capitalists. Their organization may not be the best fit for your own commercial goals. Scaling the business may be an obvious point, but what about access to fresh markets and professional talent? Think about due diligence as a way to affirm your long-term vision for your company, not a mechanism for funding expenses over the months ahead. ■
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