Due diligence

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Due Dilligence - Why ?

Every VC firm has a "diligence checklist" that lays out all the things they need to know before they can close on a deal. But very few firms do diligence by checklist.

http://www.avc.com/a_vc/2005/06/vc_cliche_of_th.html

http://altgate.com/blog/2007/10/due-diligence-what-to-expect.html

You just signed a term sheet for your first round of venture capital. Congratulations!

Tips: do biz diligence before TS

“Once the term sheet is signed, the power shifts away from the startup to the purchaser. The typical term sheet will give the purchaser the discretion to step away from the deal if due diligence is unsatisfactory, or if the necessary internal approvals are not obtained.”

After signing the term-sheet, the entrepreneur looses almost all his bargaining power! by PED Oct 13

Some other tips to prepare

http://tane.li/2008/my-tips-vc-due-diligence-and-closing-vc-deal

Over the years people have often approached me with questions like "what we need to do in order to be ready for VC investment?"

I don't know if "vendors" is the most appropriate comparaison. But I still like the comparaison because we should not forget who's the company owners. However, they are vendors in a market where there is an overdemand for their "services". Think of other markets where it's like that and you'll understand that "customers" are not always best served in those markets. The game as a start-up is to become a "must have customer"... by wallen Oct 14

IPR: intellectual property rights by wallen Oct 14

I like that way of seing things, but most start-ups never get that chance: "VCs are financial services vendors to the startups and the startups ARE the customers. The price you pay is equity," by PED Oct 13

What's IPR? There is no definition in that post :) by PED Oct 13

I haven't posted in my VC Primer series for a while. So far, we have covered: Fundraising , The Carry , Funds of Funds , The J Curve , and Management Fees .

Have your DD binder always ready

http://www.purevc.com/pure_vc/2007/01/vc_primer_due_d.html

DD as a revealing "test"

Earlier this year, I wrote a blog about how to prepare for the financing process , focusing in particular on follow-on financings.

http://bostonvcblog.typepad.com/vc/2008/10/earlier-this-year-i-wrote-a-blog-about-how-to-prepare-for-the-financing-process-some-readers-have-pointed-out-to-me-that-i.html

And it can still end up badly

A reader asked me an interesting question via email today that I thought I'd answer out loud on this blog.

http://www.avc.com/a_vc/2005/04/the_pulled_term.html

http://bostonvcblog.typepad.com/vc/2008/02/follow-on-finan.html

With the capital market turmoil raging, many argue that 2008 is going to be a tough year for start-ups to raise money, particularly follow-on capital in the form of a Series B financing (not surprisingly to any veteran viewers of Sesame Street, Series "B" follows Series "A" rounds of financing). Series B financing processes are all about credibility. Does this management team have its act together to build a great, valuable company?