[Guest article by Pavan Krishnamurthy, Partner at Ojas Venture Partners. This article is a must read for entrepreneurs who wants to understand the due diligence process.]
Many first time entrepreneurs may not fully understand about the due diligence process followed by VC’s or what to expect during the diligence phase. This post makes an attempt to demystify the VC due diligence process and provide a list of typical questions for which VC’s would be seeking answers during the due diligence process.
Before we get into what actually happens in a due diligence phase, it would be good to understand the investment decision making process followed within a VC fund. Depending on the size/focus of the fund, a typical fund on an average receives anywhere from 50 to 75 business plans per month. All the plans received are logged into a deal database. In most funds, deals logged into the deal database are discussed in the weekly deal-flow meetings. Typically, deals go through the phases of preliminary meeting, preliminary diligence, internal discussion, detailed diligence and final decision.
VC 101: The Process of VC due diligence and what it means for startups [Must Read]
