Due diligence is a crucial yet often misunderstood phase in any transaction. It ensures the business’s foundations are solid, providing Founders with the confidence to build a fast-growing enterprise—a benefit that becomes most evident during the execution of an exit strategy. However, in my experience, Founders may find the process overwhelming and intrusive, making clear communication essential. By framing due diligence as a collaborative effort to uncover strengths and address risks, it becomes a value-adding exercise. Transparency about the process and timeline helps ease concerns and fosters trust. When approached with empathy and clarity, due diligence strengthens relationships and sets the stage for long-term success.

Bad communication with a founder during due diligence is a flashing red light. Why does it happen? Sometimes it's inexperience, lack of preparation, or simply misalignment of vision. But if clarity can’t be achieved during the diligence phase, it signifies deeper problems ahead. Investors and founders are partners in growth. Trust, transparency, and open dialogue are the foundation of that partnership. If those elements are missing now, they won't magically appear later. No deal is worth the headache of miscommunication spiraling into bigger issues after investment. Due diligence is not just about numbers, it's about relationships. If you can't bridge the gap, walk away.

Effective communication is key to uncovering a startup’s true potential during due diligence. Start by asking open-ended questions that prompt detailed and meaningful responses from founders. Clearly outline your due diligence process to establish transparency and build trust. Active listening, including paraphrasing and addressing concerns in real-time, ensures mutual understanding and strengthens the dialogue. These strategies create an open and collaborative environment, allowing you to gather critical insights while maintaining strong relationships with founders.

A comunicação eficaz é fundamental durante qualquer processo, especialmente quando se trata de startups, onde a dinâmica e as informações podem ser complexas e em constante mudança. Estabeleça um canal de comunicação claro desde o início, definindo os horários de contato, os formatos de comunicação. E os responsáveis por cada etapa. Antes de iniciar as conversas, pesquise a fundo sobre a startup, seus fundadores, o mercado em que atuam e os principais desafios. Prepare um roteiro detalhado de perguntas, abrangendo todos os aspectos relevantes do negócio, desde o modelo de negócio até as projeções financeiras. Mostre genuíno interesse pelo negócio e pelos fundadores. Tenha paciência A construção de uma relação de confiança leva tempo.

Well, if you have communication hurdles at this stage of the process, I think both parties need to wonder if they are a match! The due diligence is not just looking at financials and legal docs. It is about exploring whether you can help each other and share the same values.