How can you prepare for angel investor due diligence?

2 Prepare your documents

The second step is to prepare your documents and data that will support your claims and projections. You should have a well-organized and updated folder of essential documents, such as your executive summary, business plan, financial model, pitch deck, customer testimonials, market research, competitive analysis, legal agreements, and intellectual property protection. You should also have access to your metrics and analytics, such as your revenue, growth, churn, acquisition, retention, and engagement. You should be able to provide these documents and data in a timely and transparent manner.

3 Validate your assumptions

The third step is to validate your assumptions and hypotheses that underlie your business model and strategy. You should be able to demonstrate that you have tested and validated your problem, solution, product-market fit, customer segments, value proposition, channels, revenue streams, and cost structure. You should also be able to show that you have a clear and realistic roadmap for achieving your milestones and goals. You should use evidence and feedback from your customers, partners, and experts to back up your assumptions and hypotheses.

4 Highlight your team

The fourth step is to highlight your team and their qualifications, skills, and achievements. You should be able to show that you have a diverse and complementary team that can execute your vision and overcome challenges. You should also be able to show that you have a strong and healthy culture that fosters collaboration, communication, and innovation. You should showcase your team's passion, commitment, and expertise in your domain and industry.

5 Address your risks

The fifth step is to address your risks and how you plan to mitigate them. You should be honest and realistic about the potential pitfalls and uncertainties that may affect your business, such as market changes, customer behavior, competition, regulation, technology, and operations. You should also be proactive and prepared to deal with these risks by having contingency plans, backup options, and alternative scenarios. You should show that you have a resilient and adaptable mindset that can cope with change and uncertainty.

6 Communicate effectively

The sixth and final step is to communicate effectively with your potential investors throughout the due diligence process. You should be responsive, respectful, and professional in your interactions. You should also be clear, concise, and consistent in your messages. You should avoid jargon, exaggeration, and ambiguity. You should also be open, honest, and humble in your feedback and questions. You should aim to build rapport, trust, and credibility with your potential investors by being transparent, authentic, and enthusiastic.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?