Due Diligence is typically a no brainer for big established companies. But for start-ups, especially those at the pre-series stage. Everything is so hazy – My take is there is not much due diligence done because what is there, is typically just an idea. Whether the product really works, remains to be seen.
Does anyone have any experience on doing due diligence on pre-series start-ups? How is it done?
I think its more about the investors knowing about the: team: have these guys/gals done it before? are they competant? opportunity: what are they trying to build? is it functional? is it solving a problem? market space: how big is this opportunity? if they take the risk on this startup, it needs to be big enough to win big even if they somehow fail.