Startup Funding Espresso -- How Does Due Diligence Differ Between Angels and VCs?

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

How does due diligence vary between angels and venture capitalists?

At a high level, the diligence is the same between angels and VCs. They both look for a good team, a strong market, and a quality product. 

At a detailed level, the angels who come in earlier than many VCs will look at a deal differently. 

On the first pass, angels look for product validation and market validation. Does the product work and will someone pay it?  

On the second pass, angels look for a strong team that can take it all the way and a large market that the company can pursue.

VCs on the first pass look for a strong team, initial traction, and a large market. 

VCs on the second pass look for synergies in the team, KPIs that show growth, and scalability into the market. 

It’s important to understand who you are pitching and what they look for. 


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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