Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.ARCHIVES
Technology Entrepreneurship in India - Teams
Technology Entrepreneurship in India - Generating Revenue
Technology Entrepreneurship in India - Raising Capital
Equities, ETFs, F&O
Oct 2011: Equity Risk Premium for India
Jun 2011: Investing in Indian equities
Technology Enterprises in India
Nov 2010: Technology investment in India - WATER
Aug 2010: Technology enterprises in India - 3 avatars
Risk Capital for MSMEs
Mar 2010: Risk mitigation for investors in MSMEs
Mar 2010: Why don't (Indian) MSMEs get risk capital?
Feb 2010: Angel investing - Will it work for Indian MSMEs?
Feb 2010: What's so special about innovative MSMEs?
Feb 2010: Where do Indian/NRI (V)HNIs invest?
Feb 2010: Funding options for innovative MSMEs in India
Jan 2010: Innovative MSMEs in India
Due diligence - A necessary evil
(Last revised Mar-2012, Send comments to email@example.com)
The broader definition of due diligence ('DD') in venture capital includes the analysis of all aspects of a venture - technology, team, market, finance, governance, legal affairs, etc. Each investor has their own unique set of items in their DD check-list - usually a result of their cumulative investing experience and judgment.
Entrepreneurs usually underestimate the time required for the DD process; they tend to get frustrated with the various demands for documents, legal/financial paperwork, references, etc. Another common source of grief is the entrepreneurs' belief that the investor doesn't understand their technology.
To close an investment round in time, founders must manage the DD process well: