Top Tips series: 5 tips for surviving the due diligence process

You’ve done all the hard work of securing interest from the investor you’ve had your eyes on – you’ve given your pitch, met the fund’s executives, and discussed heads of terms. So, what do you do now to survive the due diligence process? 

We enter into detailed diligence with about 1 in 20 of the companies that we review the business plans of.  Sometimes the combination of the volume of work along with the very high stakes can make it feel like quite a daunting process (for both parties!), so here are some tips on how entrepreneurs can survive the diligence process:

1. Know your facts

To help evidence the stage of your business, investors will be looking for data on your performance to date, such as user numbers, traction, impact data etc.  Having this information to hand, as well as showing how you analyse and react to it, makes for a very good start.

2. Curb your enthusiasm

To save yourself the head (and heart!) ache of missing targets in the future, try to present and agree a realistic plan at this stage of the process.  Promising the world and failing to deliver doesn’t make anyone feel good, so balance out your ambition with a healthy dose of realism.

3. Get the home advantage

Being on home turf can be great for a boost in confidence, so invite investors to your place so they can see you in context, meet the team, and get into the heart of the action.

4. Plan carefully

To help keep things on track, agree a detailed plan and timeline with your prospective investors and check-in with them regularly to make sure things don’t slip.  If organisation doesn’t come naturally to you, enlist a colleague to help.

5. Be patient

Due diligence can be a time consuming and demanding process, but take a timeout to remind yourself why it is you approached your investors in the first place and of the value you believe they will bring.