How can you improve VC due diligence with your network and resources?

1 Use your network wisely

Your network is one of your most valuable assets as a VC. It can help you source, screen, and validate deals, as well as provide insights, feedback, and referrals. However, you need to use your network wisely, and not rely on it blindly. You should seek diverse and independent opinions from different sources, such as experts, mentors, peers, customers, and other investors. You should also be careful about conflicts of interest, confidentiality, and reputation. Your network can be a powerful tool, but you need to use it with discretion and integrity.

3 Focus on the key drivers and risks

Due diligence can be overwhelming, as there are many aspects to consider and analyze. However, not all aspects are equally important or relevant for every deal. You need to focus on the key drivers and risks that can make or break the investment. These drivers and risks may vary depending on the stage, sector, and strategy of the startup, as well as your own investment thesis and criteria. You need to identify and prioritize the most critical questions and assumptions that you need to validate or challenge, and allocate your time and resources accordingly.

4 Be transparent and collaborative

Due diligence is not a one-way street, where you interrogate and scrutinize the founders. It is a two-way dialogue, where you also share and demonstrate your value proposition, vision, and expectations. You need to be transparent and collaborative with the founders, and establish trust and rapport. You need to communicate clearly and frequently, and provide constructive feedback and support. You need to align your goals and interests, and negotiate fairly and respectfully. You need to treat the founders as your potential partners, not your adversaries.

6 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?