November 30, 1999 in Uncategorized

Two-Way Due Diligence

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We always advise entrepreneurs to choose their investors wisely and make sure they perform due diligence just like the investors are doing research on the entrepreneur.  The entrepreneur should know the firm, the portfolio, the partners, the culture, the track record, and the “word on the street” for the VC firms they are pursuing.  Don’t just take a “shotgun” approach and go after every VC firm –- they aren’t all fits for your business.

One tool you can use is  This website invites entrepreneurs to rate VC firms on track record, operating competence, pitching efficiency, favorable deal terms and execution assistance. Users also can post comments on their experience, all of it anonymously. Visitors to the site can search for funds by geography and by funding level.  As of late August, the site had more than 2,400 members — all entrepreneurs — who had posted 3,200+ reviews of nearly 3,600 funds.  Not many of the main Atlanta VCs have been reviewed on the site yet.

This is useful tool for a few good data-points, but be sure to also make some phone calls and do your own independent research.

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