You know what an entrepreneur’s idea of torture is?
Due diligence.
Why?
Because it can be so dang one way.
The VC asks a zillion questions.
Requests a trillion documents.
And then sends a million follow-ups:
That the founder needs to chase down.
What’s happening here?
Diligence is being done TO them.
So as an investor…
…how can you flip the script?
How can you use the diligence process:
Not only to get the information you need.
But to build a stronger relationship with a founder.
A relationship that might mean the difference between:
Being an investor instead of an outsider.
Do diligence FOR them.
Or as Sidecut Ventures says, “Do Diligence”
Like this:
Send them your market map (so they can benefit from the hundreds of hours of research you’ve done on their space, and you can learn how they think about the competition).
Connect them to potential customers (so you can find out how their sales pitch actually resonates, and they have a shot at scoring a new customer or two).
Refer some of your smartest friends to them (so you can see how they run their recruiting process, and they can potentially add a great person to their team).
Introduce them to other VCs who know their sector (so that you can get a smart 2nd opinion, and they can get connected with another source of capital).
Remember:
Due diligence doesn’t HAVE to be a one-way street.
Make the time a founder spends with you worth their while.
Even if you don’t end up writing them a check.
