I have been thinking a lot about the crazy stock market swings. Will it impact our portfolio companies?  Certainly, but not exactly sure how.  Is there such thing as timing luck?  Certainly, we sold a company to a Chinese buyer on July 1st.  That would not have happened much after that!  Will startups have a tougher time raising capital?  Certainly, investors get nervous with any volatility.

But I do feel strongly that companies with sound business models going after large addressable markets with low barriers to scaling up quickly will always find investors.  You might read that prior sentence and say “duh, no kidding”.  That is fine.  Just don’t panic as you are reading it.

I just read a great post on this week’s stock market downturn (which now seems like an upturn!).  Eric Paley is one of the head guys at Founder Collective (a fellow Cornellian, Micah Rosenbloom, is also one of the head guys at FC; Micah and Eric started a very successful hardware company together in business school……and sold it very successfully too!).  Anyway, I encourage you to read Eric’s post here for a good perspective on the funding cycle peaks and valleys.

Have a great weekend.

Due diligence never has a good connotation.  For companies raising money and management teams words like painful, slow, tedious, and torture come to mind.  Pick your adjective.  For investors, words like tedious, eye opening, boring and critical come to mind.  Due diligence is critical to help VCs derisk our investments a bit.

I recently read a fabulous (now that is a word you never associate with due diligence!) article on the process.  It was published by Lisa Suennen (I do not know Lisa) on PE Hub and is here.  Lisa’s post includes a slide deck that explains her vision of due diligence as a 12 step program; this is clearly relevant as due diligence will drive anyone to the bottle!  The slide deck is here.

The wonderful thing about Lisa’s presentation is that she asks questions throughout her entire deck. And they are the right questions.  Preparing for due diligence using this presentation as a guide will greatly reduce the pain of going through the due diligence process.  For companies raising funds and management teams, I suggest getting your ducks in a row in advance –  create a separate folder in your investor file sharing system (dropbox or otherwise) for each category and then populate each folder with relevant materials and write-ups.

I hope this helps you survive due diligence!  Have a great weekend.