It varies based on stage.

The earlier the stage, and the smaller the check, the more “simplistic” the diligence usually is. What do her peers think of her?  Her accelerator?  Her earlier angel investors?  Her ex-boss, if she had any?  Especially if it’s a first-time founder, without even a real job before — there’s only so far you can go.  Key here is your personal learnings and impressions of the founders.  Really beyond that, you are just looking for any flags that come up.

Later, the bar goes up.  Background checks are more formal. VCs want to do 4-5 “on sheet” reference checks, and as many off sheet as they can.  They want to see what the VPs you’ve hired think of you.  What your customers think.  What your partners think.

Then sometimes, in M&A, it becomes the most intensive.  A public co. often really wants to know who they are buying.  This can sometimes be the most intensive team diligence of all.

So it gets more formal, and more time-intensive, as the stage and check size go up.

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