“What we hope ever to do with ease, we must learn first to do with diligence.” – Samuel Johnson
No one wants to invest in a startup that is doomed to fail.
Enter: Due Diligence.
This is the most important part of the investing process, and the most critical factor in that process is understanding the startup’s team.
Since a startup has only a nascent product and perhaps some intellectual property, the team is the number one aspect of the company that you can dig into. It is your number one asset when it comes to really understanding if the business is worth your investment.
Here are some things to look for when doing your team due diligence:
- Team resumes. Also, look at the resumes of those who are prospected to join the team when funding becomes available. The CEO should know who they are planning to bring on once they have the funding.
- Domain knowledge. Who has the knowledge and how current is it?
- Complementary skills. Is there someone who has sales skills? Is there someone who is going to build the product? Is there someone with people management skills who has the ability to grow the team?
- How long the team has worked together? Ideally the team has some experience working with each other. The more time they’ve had together, the better.