Be Better Prepared for Technical Due Diligence
I have been on the receiving end of several technical due diligence assessments instigated by VCs (pre-investment) or acquirers (pre-purchase). I have also been the inquisitor on a few occasions. So I thought it might worthwhile to write this post to share my thoughts on this process and hopefully help companies better prepare for this event.
The first thing to recognize is that the assessor is not there to catch you out, trip you, up or somehow prove you are incompetent, nor is it likely that he's there to try steal your job, so first and foremost don't be threatened or intimidated (it's not the Spanish Inquisition, after all "Nobody Expects the Spanish Inquisition"). It is however extremely likely that he or she is, or has been an entrepreneur and empathizes with you, so be cooperative and cordial (maybe even down right friendly). They will understand the challenges and the realities of startup, rampup and speedup life and are not expecting perfection. I personally would love it if every entrepreneur could get funded, or exit with an acquisition that gets them the rewards they have worked so hard to attain, but the reality is different. Remember however the assessor is contractually obligated to do a thorough evaluation and report honestly any deficiencies, to not do so would risk a lawsuit for negligence. Also keep in mind that the purpose of an individual doing this, rather than have the investor or buyer just deliver a survey to you for you to complete, is that they are evaluating you and your team, how well you think on your feet, how you engage, and your thought processes. So expect it to be an interactive conversation, more than an outright quiz or exam, which would be painful and boring for both parties.
To read the full, original article click on this link: Selling or Funding A Startup? Tips On Surviving Technical Due Diligence
