Book Review

Venture Capital Due Diligence

Due diligence can be a painstaking, but critical process in assessing investment opportunities. Venture Capital Due Diligence written by Justin Camp, founder and general partner of Camp Venture (www.campventures.com), provides a thorough VC due diligence framework that includes tools, techniques, tip sheets and checklists to get a more complete picture when assessing companies for investment.

This is a must read for all VCs and all types of venture investors. It takes a lot of the guesswork out of the due diligence process. VC Due Diligence, published by Wiley Finance (www.wileyfinance.com) will help you learn how to make smart investment decisions and increase the return on your VC portfolio. In clear language, Camp’s book instructs readers how to perform due diligence of a firm’s management, business model, products and legal issues. Beyond the hard facts, Camp also discusses the importance of assessing a company’s intangibles – focus, momentum and character.

VC Due Diligence focuses on several major players in the VC community, including John Doerr of Kleiner Perkins Caufield & Byers, Don Valentine of Sequoia Capital and Kevin Fong of the Mayfield Fund. Camp explores the opinions and practices of these key VCs to present possible answers and guides during each step of the due diligence process.

Camp’s book is centered around critical questions that every VC must ask during the due diligence process, such as:

·         From what source did the deal come or who referred the deal?

·         What is the overall quality of the company’s business plan?

·         Who are the company’s existing investors, and who are the potential co-investors?

·         Who is the company’s existing accounting firm?

Each question puts readers in the position of VCs doing due diligence on a particular company that creates a practical understanding of how the process works. In clear language, Camp has created a framework that can help VCs make better decisions. His system has become the basis for two Wharton graduate-level MBA courses and the foundation of his book.  It’s an essential guide that helps you uncover potential problems, while showing VCs where to look and what to look for during due diligence.

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