You're navigating due diligence with conflicting data sources. How do you make the right call?
In venture capital, making sense of conflicting data sources is crucial for sound investment decisions. Here’s how to navigate this complex task:
How do you handle conflicting data in your due diligence process? Share your insights.
You're navigating due diligence with conflicting data sources. How do you make the right call?
In venture capital, making sense of conflicting data sources is crucial for sound investment decisions. Here’s how to navigate this complex task:
How do you handle conflicting data in your due diligence process? Share your insights.
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Due diligence is a non negotiable ik deal making hence it’s important to have founders be aligned with your expectations of transparency and accuracy. In case the sources are conflicting, you should not shy away from asking tough questions and validating through multiple sources. It’s good to have experts by your side who bring years of experience in doing DD. They often have a checklist of questions and processes they follow. Transparency has to be reflected on both the sides- founders as well as investors. Make sure you clearly specify the objectives of data collection and do not overwhelm the founders as they have a lot on their plate.
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When different sources of data don’t align typically helps to have a bottom up approach, sample test or ground level research to provide signals on which sources might be worth further digging into. Helps to look at assumptions made and sources of data, to look for longer term data sources for reliable trends and to make efforts to avoid any conscious or unconscious biases such as confirmation bias when trusting one data source over another.