Here's how you can successfully navigate the due diligence process when seeking venture capital.

Having a physical/virtual war room ready before you engage your first vc, you will find it much more comfortable and with less anxiety. Each VC will have slightly different requirements but the core will be essentially be the same.

I would say this as I have a financial background. But the financial model is critical to the investment process. Get this right, and keep it simple but covering the material items and everything else. - team - unit economics - contracts (customer and supplier) - key metrics - etc. Will fall into place in the data room

Speaking as a VC, and former founder - the best founders have the best data rooms and docs. Organized, crisp, telling a story. Have a FAQ and add to it. Have all your investor updates neatly ordered and open for folks to see. This is simple and easy - and folks who mess this up are telling investors something about themselves. "We play the way we practice" and if you are organized in your life, in your startup, then it will flow through to your investor facing documentation.

Again be prepared and understand your value proposition, and your competitive positioning. Practice it with as many advisors as you can to prepare for the big pitch!

Get the reps in. If you can't tell your story well - without slides - in the classic elevator ride - then you're not ready. Have a tight core story, then go back and add to it. I always am surprised when I'm being pitched and am a few minutes in and don't know what they do or why they do it. Make sure your deck and materials tell the same story. Repetition doesn't spoil the prayer. Slide titles should be skimmable to tell the story. Slides just add more detail and context. Lead with the product and tech and the what, following a compelling why (market pain and opportunity).

You will always be asked what your valuation is, as a test to see what your expectations are. Be realistic but, at the same time, you could ask them first what their valuation metrics are and what they might to pay for a company like yours.

Most of our investments have followed meeting and learning from founders over a longer period of time. We always go back and check what you'd say you do vs. what you actually did do. If we don't invest in this round - we might in the next. But we'll still have the deck and story from last time, and compare.

Revenues trump all; in lieu of revenues, LOIs and NRE; in lieu of this, active and engaged customers, angel investors who see the need, etc. If you aren't focused on GTM and PMF then we'll worry a lot. Too many builders build for fun without considering what the customer really wants and needs.

Successfully navigating the due diligence process in VC hinges on demonstrating traction. Whether it’s through growing customer numbers, showing consistent revenue growth, or engaging deeply with your target market, these are the metrics that speak volumes to investors.

In my experience as both a partner at a VC firm and an exited entrepreneur, the best process for navigating due diligence is to start by asking the investor about their process, timeline, and decision-making strategy. - Do they have a due diligence checklist of all documents required? - Do they have a general timeframe where they seek to make a decision? - Do they have an investment committee that makes decisions (especially important for groups of investors like angel syndicates)? - Do they use tech to help them navigate the process (like Scorecard.vc)? With so many companies seeking venture capital from investors, it's important to understand the process from the investor's perspective and not add any friction by not being prepared.

The due diligence process is not always an easy task, so it's necessary to be patient and ensure that a VC fund controls this process in the right way (especially when some parts of due diligence are done by an external advisor).