14. My #1 advice to startups: Always be due diligence ready

When founders come to me for advice, they are often looking for help with pitching, fundraising, strategy, or security. At some point, they will often ask what one piece of advice I would give them. I always tell them “stay due diligence ready”. This comes from my personal experience of being totally unprepared when an offer to buy my business come out of the blue five years after starting. What followed was months of the hardest work and longest days I have ever experienced. We had to obtain signatures from former employees and past vendors for work done years earlier. We hunted through old emails for key contracts and agreements. It was a mess. If we had started keeping all of our records organized early on, and kept them up to date, we could have avoided all that pain. In the end, the deal fell through and it was for the best, but it was an experience I will never forget. The bottom line is that it is much easier to stay due diligence ready than to get due diligence ready, and the earlier you start the simpler the process will be. Investors will want different things, so it is impossible to be perfectly prepared but with the right systems and processes you can be 99% ready and able to fill in that last part with minimal effort. The following is my list of the records you need to have close to hand and up to date.

Video: https://youtu.be/4dMpbfNaB-M

Blog: https://www.feeltheboot.com/blog/duediligenceready