Due Diligence

Definitions

1. The comprehensive investigation an investor performs before committing capital — examining financials, technology, team, market, legal liabilities, and whatever skeletons live in the closet. The part of fundraising where optimistic projections meet skeptical accountants.

   In plain English: The investigation investors do before giving a company money — checking that everything the founders claimed is actually true.

2. Technical due diligence specifically evaluates the codebase, architecture, infrastructure, team capabilities, technical debt, and scalability. Investors hire technical assessors to determine if the technology actually does what the pitch deck claims.

   Example: 'Technical due diligence killed the deal — the assessor found the 'AI-powered' product was actually 47 if-else statements and a CSV file.'

   Source: technical due diligence

Related Terms

• Term Sheet
• Pitch Deck
• Down Round
• Technical Due Diligence
• SAFE
• Drag Along
• Information Rights
• Public Benefit Corporation
• Right of First Refusal
• ROFR
• Stage Gate