How do you track the progress of your due diligence process?

1 Define your scope

The first step in tracking your due diligence process is to define your scope and objectives. What are the key questions you want to answer about the target company? What are the sources of information you need to access? How much time and resources do you have to complete the process? By defining your scope, you can prioritize the most critical and relevant aspects of your due diligence and avoid getting overwhelmed by irrelevant or redundant data.

2 Create a checklist

The next step is to create a checklist of tasks and subtasks that you need to accomplish for each aspect of your due diligence. A checklist helps you organize your work, assign responsibilities, track progress, and identify gaps or issues. You can use a spreadsheet, a project management tool, or a dedicated due diligence software to create and update your checklist. Some common categories of tasks include market analysis, product validation, financial review, legal review, and risk assessment.

3 Set a timeline

The third step is to set a realistic and feasible timeline for your due diligence process. Depending on the size, stage, and complexity of the target company, due diligence can take anywhere from a few weeks to several months. You need to estimate how long each task will take, and factor in contingencies, delays, and feedback loops. You also need to align your timeline with the expectations and availability of the target company, your team, and your co-investors.

4 Communicate regularly

The fourth step is to communicate regularly with all the parties involved in your due diligence process. Communication is essential to ensure that everyone is on the same page, to resolve any doubts or conflicts, to share insights and findings, and to solicit feedback and opinions. You can use various channels and methods to communicate, such as emails, calls, meetings, reports, presentations, and dashboards. You should also establish a clear and consistent reporting structure and frequency for your communication.

6 Learn from feedback

The final step is to learn from feedback and improve your due diligence process for future opportunities. You should solicit feedback from the target company, your team, your co-investors, and other stakeholders on how they perceived and experienced your due diligence process. You should also reflect on your own performance and identify what worked well and what can be improved. You should document your lessons learned, best practices, and recommendations, and incorporate them into your due diligence process for the next time.

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?