Due Diligence

“We have a standard of 21 questions, and, you know, we analyze stuff, and wherever we feel that something isn't adding up, we go deeper, and then we go deeper. Just, you know, for the sake of the audience, we have almost a 170 questions total, you know, that we…”

“The process of delivering all the due diligence took a little bit longer, and I was hoping to celebrate probably two months earlier than it actually happened”

“Because I think because they're small projects, there wasn't a huge amount of due diligence, but so it made it really smooth and quick processes in both cases.”

“And triangulating these three things together, looking for conflicting contradictory data is often the most interesting to highlight those areas of risk.”

“If you're an early stage startup and you're a new founder, they're going to spend more time doing due diligence that, and you need to be prepared for that. You know, you're a founder of a startup that's had several successful exits and have had several success…”

“You realize like, holy shit, this is transformational. It's taking tasks, which used to be, you know, days or hours and it's turning them into minutes.”

“And now it's becoming almost a commodity where you're expected to do it, but clients are also not really that excited to pay for Very simple contract review when they know that AI can do, you know, 99% of it.”

“A lot of legal work is low differentiation. You know, if you're doing a DD from, you know, law firm X or law firm Y, kind of getting the same deal. And so when you have this perfect Equilibrium of services and somebody disrupts that by taking a new approach. C…”

“And it, and it's also not a race to the bottom in terms of pricing. Because if you pull down, let's say the cost of a due diligence, you free up more time to spend with a board on advising them on, you know, a really complex merger or a really complex acquisit…”

“Try to build a product that is very easy to transfer and get ready things done before even the due diligence process started, because you, at the end of the day, you have to transfer the assets, right? So be prepared yourself so that there is very less time be…”

“Having all of your accounts separate, not having like your AWS account mixed with four other different startups or projects just makes everything so much smoother when you get to due diligence and the transfer stage.”

“The only thing that really matters in due diligence is two things if you're buying a company. Are the numbers real? Because we buy, we don't buy hopes and dreams. We buy realities and cashflow. And two does it seem like the numbers that they gave me will conti…”

“Having some folks with some expertise looking at helping us out with diligence and looking over our shoulder on stuff. Not only is it helpful for us as the investment manager, it's also really strong validation for the rest of the LPs to go, oh man, ok, this l…”

“So I'm not really interested in investing a lot of time Except during the beginning stage, which is really the due diligence and making a decision on whether the investment is attractive or not.”

“You never really know exactly what the relationship's gonna be like before you invest, no matter how much diligence you do.”

“So to try to reduce the amount of time for DD, we did a face-to-face, which I'd never done before, but I a hundred percent recommend it.”

“I thought once we're done with due diligence, like, we're done, you know. We just need to sign the contracts and get on with our lives, but Hell no. That was just half of the process.”

“During due diligence, you kind of, maybe as a founder, you yourself, you see, You know, business for what it is. Because sometimes as a founder, you know, it's our it's our child, it's our project, and we care about it. So sometimes, you know, we just say, oh,…”

“You can't trust lawyers with diligence.”

“If I understood it better, I would have started the process as we started due diligence. And not have lost that month in the due diligence to then start the process.”

“So you see some companies when they're negotiated by a company do this very lengthy and detailed and bureaucratic diligence process and they hire a firm and they write this big huge memo that nobody ever reads and or some wonk reads it but nobody important rea…”

“Because usually when a partner tells you to pick someone, It means that there's a level of due diligence you didn't really do.”

“There is so much having worked at three firms that no LP would ever probably unearth, even if they tried. Firms are organic organizations, and no matter how much we think we know, we don't actually know what motivates them.”

“The quicker they get to an LOI, or the quicker they get to, you know, responding to questions they ask, or sending you additional questions they may have, that's kind of what Due diligence is going to be like. If it's really slow getting the LOI, if it's reall…”

“When you sign an LOI, don't stop selling. Do not stop selling the business. Like you're going to have all this stuff that the buyer wants. Right. What you should also always do is record like a loom on how marketing works, how sales works, how showcase me, you…”

“And why it's because the diligence is always confirmatory. VCs decide they want to do the deal and they don't want to hear reasons to not do it.”

“When you share that with the buyer doing during due diligence that can exponentially increase the chances of close case, something pops up.”

“The pace of investing was fast, so fast and furious that people intentionally did not do the diligence, ok? It was an intentional choice”

“I show proof of earnings and ask for the set of questions, and I'm always proactive at any stage, and I tend to demonstrate and explain more than they ask for.”

“And I think that the most effective way to investigate because buyers can record the section, the session and watched later.”

“And then, you know, Bain and McKinsey both have nine figure plus businesses in a slightly different form of due diligence.”

“Transferring assets can sometimes be harder than due diligence, just because, like, I've heard stories of people having, you know, some really good products or businesses inside of a single AWS account, they got to pull it out Or a Stripe account with multiple…”

“I think if somebody in due diligence is really clueless what to do, what to ask for, it also kind of shows they don't have any plan on what to do with the business after that”

“The only, my, only thing that really matters is like, dude, how much are you going to pay? That's it, right? So get that conversation, at least that's what I do, get that conversation out of the way first. And then start worrying about the diligence and everyt…”

“Do calls individually. It's really difficult to do a group Zoom or Teams call in terms of due diligence because you might have people talking over each other. You can't pick up on individual Brady Bunch boxes that when the senior PM talks, the number two rolls…”

“You ask, where is it going? I think it's going to be a little bit of both. I think our meetings will be more meaningful, and that instead of doing a marathon all day meeting on site where we're exhausted and they're exhausted, or flying to Hong Kong and our ey…”

“A lot of the due diligence work, like getting my books in order, getting, you know, just getting the things that I know that they're probably going to ask for doing a lot of that prep work even before I listed helped, helped a lot so that by the time it got in…”

“A prudent investor never purchases ownership in a business without conducting the necessary due diligence. You should study about the company and its competitors, both listed and unlisted from company website, company filings, information on the internet, and …”

“I think that there is a limited amount of due diligence that you can do depending on the deal size, and so I think I probably over complicated that part of the process when I first got started.”

“I actually worked with a due diligence company, actually, who, like, went to the code base and did all of that work, and I felt like they It just wasn't all that helpful at the deal sites that I was doing to get that level of, like, there were things that were…”

“If you spend, you know, more than 20 hours doing due diligence, the success of the investment is going to be higher. I don't remember how much it is, but it's like a double digit percentage higher.”

“If you ever want to sell your company, if you ever want to raise investment, when they get into due diligence, they're going to ask you and they're going to make you sign something that says every person who has touched this code or every person who has contri…”

“From the day you write to us to a term sheet is anywhere between six to eight weeks, if not more. And from a term sheet to a dispersal is another 10 to 12 weeks, depending on what is your readiness on the, you know, from our due diligence perspective. So it's,…”

“If you put it in a time spectrum, I would say what used to take six weeks now takes 18 months.”

“The longer that someone takes, the longer they're going to be with you.”

“Yeah, I think what it does is it forces venture capitalists to make decisions that aren't entirely informed. So if you actually read a white paper it's basically 30 pages of really technical information that requires diligence, which you couldn't possibly do i…”

“I think it's valuable to Make it up as you go along because it allows you flexibility to adapt to changing market environment, to identify the key issue or issues at each individual firm, and every one of these is different, and also enables you to learn each …”

“Between the LOI signing and the actual money being exchanged when the deal potentially closes, there's this big period of due diligence, and guys, this is like the graveyard. This is where deals fall apart.”

“Due diligence is a pain in the butt, but look, you have to keep leverage when you're doing these deals, and I had a hundred percent confidence that if it fell through, we could very easily go back to one of the other companies who made an offer in one of their…”