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How significant is it to make it to due diligence?
A pre-seed (*truly* pre-seed, aka pre product/revenue) firm we pitched recently sent over their “Pre-Closing Due Diligence Form,” which just asked about company structure and founders. It’s been 5 days since we submitted it and we haven’t heard back. Is this concerning? Are my expectations rooted in the unrealistic timelines from 2021 when companies were closing rounds in a week with very little diligence done at insane valuations (and are now struggling to raise series As)? The first call went great, the GP (he’s solo) showed genuine enthusiasm and followed up via email to reiterate that he really enjoyed meeting and would like to move on to the next step (the form). Our company structure/cap table is clean since we’re newly incorporated. But am I reading into the “Pre-Closing” part too much as a positive sign? For context, this GP has also written and spoken on multiple podcasts that this is his standard DD process before he makes an investment, since most of the companies he invests in are pre-product/revenue so there isn’t much data to review. He’s also said he doesn’t waste his time moving on to diligence with companies he’s not genuinely enthusiastic about and he makes investment decisions typically between 1-2 meetings. And all the founders I’ve asked about him have said he has really high integrity and sticks to his word. He’s just known for taking a long time to respond (a few weeks).4
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