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If you're a founder raising capital, diligencing your prospective investors critical and even more important in a remote-first world. So, how do you separate the bullsh*t from reality during a fundraising process?
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1/ Before you even get to the diligence process - ask upfront if the firm is comfortable signing a term sheet remotely. Most will say yes regardless, but it's important to bring this up early to prevent issues later in the process.
2/ Stress test the depth of the support. Are they providing intros upfront and then not much else? Think through what you want in a venture partner and then test how much support they can really offer.
3/ Ensure you genuinely like your primary partner. You're entering into a long-term relationship, so make sure they're the person you want by your side during the inevitable ups and downs.
4/ Float scenarios and see what happens. Bring up the things you're currently struggling with (whether it's hiring, forecasting, or building out a sales team) - how helpful are they? Do they immediately dive in and start helping? Do they have relevant experience?
5/ And most importantly, talk to their portfolio companies! And don't just talk to the ones that were 20x outcomes -- find out how they act when things go south. If they aren't eager to offer up these intros, that probably tells you all you need to know.
6/ My full thoughts are here - what am I missing? https://link.medium.com/3sx0qqp5H5
