June 05, 2005

How to do due diligence on a VC

Rick Segal of J.L. Albright Partners has some interesting tips on how entrepreneurs can check out VCs they plan to do business with:
Ask different questions. The purpose, like the above, is to get insight into who you are dealing with so, go down a list of things like:

A. What's your favorite blog?

B. What kind of laptop do you have?

C. Which cell phone do you favor?

D. Do your kids do the SMS thing?

E. What do you hate about serving on boards?...

...Show up unannounced to the firm just to drop by. See what kind of reaction you get. Think about it. We are family, working close together, long term relationship, blaah blaah. Right. Show up unannounced, ask to use an office, the phone, grab a free pop, whatever, but note the vibe, it will be telling.

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.