Due diligence is the tire-kicking investigative process performed by investors and business buyers to learn more about the operations and business potential of a company. Sometimes investors will conduct thorough due diligence before issuing a term sheet proposal of investment or acquisition terms; other times, deal terms are not binding and are subject to “the successful completion of investment due diligence.” Most venture capital funds have a specific list of documents and issues that, at a minimum, will be explored during due diligence prior to closing a transaction.

See: 50 Questions Investors Will Ask About Your Business