What is due diligence?

A due diligence is a process where the venture capitals have a chance to sniff bite a startup. A sniff is a good hard look. A bite in a piece of investment in the company. The due diligence is a complicated process where the investors have to go deep in the history of the entrepreneur. An investment is a ten year marriage between entrepreneur and the investor.

The due diligence includes credit checks, work history, reference checks, personality traits, money, property, spouse, children, and many other factors. The venture capitals set up a model where they would pick young entrepreneurs from schools like Stanford and MIT and groom them to become CEOs of startups. This model hasn?t really paid out as well as imagined. We haven?t had a unicorn, the likes of Facebook and Twitter for almost a decade. The personality traits nowadays is the most important factor. There is too much competition out in the venture capital industry. There is pure lack of trust. So more now than anytime before, it?s important to do proper due diligence of character. People that will watch your back in times of trouble and help solve problems, rather creating them.

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