Doing Due Diligence

One of the lessons I learned from Venture Capital is derisking investments through due diligence. Due diligence is the process of analyzing a company’s product, market, team, business model, financials, etc. to determine if a firm should invest or not.

Especially when investing early in a startup, there’s limited information to make a decision on. Naturally, early stage investing is risky, but doing due diligence is an effective way to collect all relevant information to make an investment decision.

This mental model of doing due diligence I find is applicable when making any important decision. For example, when choosing which early stage startup to work at post graduation.