As a founder, the biggest thing that always surprised me was the limits of due diligence.
- In my first start-up, we had a very exotic, complex technology. None of the investors ever understood it.
- At EchoSign, the vast majority of investors that I met with understood what we were doing at the time — but not why it was changing/creating a market.
Now I understand. It is hard, especially in today’s hyper-compressed time frames, to really understand an early or early-ish stage product and even the market.
But the VCs weren’t lazy. They did a great job on team diligence, prospect diligence, and customer diligence. It’s just going an extra layer deeper on diligence was what I expected before getting a seven-figure check. But in the reality — not so much.