Chapter 7. Due Diligence

  • What Do the Venture Capitalists Want When They Visit?

  • What to Expect from Investigations of Your Proposal.

When you and the venture capitalist have reached an understanding on the terms and conditions of the investment, the venture capitalist must begin what is known in the VC world as “due diligence.” To be sure, before the VC made a commitment some due diligence was completed. Some venture capitalists will not issue a commitment letter or term sheet until all of their due diligence has been completed.

Due diligence simply means that the investor must conduct background checks on the management team, complete an industry study, and verify the representations in your business proposal. In essence, the VC is reviewing you, ...

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