Due diligence is a grueling, invasive process designed to break you. I'll give you a tactical field guide for surviving the onslaught, managing the data room, and using the process to your advantage.
Why Most Approaches Fail
Many common approaches to AI due diligence are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
What I've Learned From 29 Companies
Across 234 angel investments, including Anthropic, a few patterns in AI due diligence come up again and again.
The founders who handle AI due diligence well understand that the market doesn't care about your roadmap.
Real Talk: What Actually Matters
Here is what actually matters in AI due diligence.
First, execution speed beats perfection. Every time. Companies rarely fail because they moved too fast on AI due diligence. Many fail because they moved too slowly.
Second, measure everything. If you can't measure it, you can't improve it. Set up tracking from day one, even if it's basic.
Third, talk to your users. It sounds obvious, but many founders make decisions about AI due diligence in a vacuum. Get out of the building. Talk to real people.
This connects to broader themes around AI market sizing, AI startup pivots, AI talent wars, AI due diligence that I've been thinking about a lot lately.
Wrapping Up
I've shared a lot here, and I know it can feel overwhelming. But you don't need to get AI due diligence right on day one. You just need to get started and keep improving.
Founders who do well at AI due diligence tend to share one trait: they're relentlessly practical. They don't chase perfection. They chase progress.
That's the mindset I'd encourage you to adopt. Start where you are. Use what you have. Do what you can. And keep pushing forward.
As always, I'm rooting for you.
Frequently Asked Questions
Q:How often is this guide updated?
I revisit and update my guides regularly as I learn new things and as the market evolves. The core principles tend to stay stable, but specific tactics and tools get refreshed based on what's working right now.
Q:How should I work through this guide?
Don't try to absorb everything in one sitting. Read through once to get the big picture, then go back and work through each section as it becomes relevant to your current challenges. Bookmark it and return to it regularly.
Q:Who is this guide designed for?
This guide is written for founders and operators who want practical, actionable advice rather than theoretical frameworks. Whether you're just starting out or scaling an existing business, the principles here apply across stages.