From Vision to Reality: What Due Diligence Really Looks Like in a Venture Capital Fund

In the world of startup investing-where every pitch is dazzling, every market is a “trillion-dollar opportunity,” and every founder believes they’re leading a revolution-due diligence (DD) is what brings us back to earth. It’s a long, deep, and demanding process, but also the strongest tool we have as a VC fund to evaluate, clarify, and make critical decisions.

At our fund, like in many others, DD isn’t just a basic step before investing-it’s a core process meant to truly understand who we’re working with, what the potential is, and what the real risks are. It involves technical questions, business insights, a healthy dose of intuition-and above all, active listening and thorough investigation.

Over time, we’ve conducted DD for several early-stage companies. From those processes, we’ve gathered a few recurring insights. This is not a full checklist, nor a full manual. But these are the highlights we’ve found ourselves returning to again and again.

What Do We Look At? (Or at least, what do we always insist on understanding)

  • Business Model – As business students, this is our anchor. We've met companies with excellent ideas and a real target audience, but no clear plan for turning vision into revenue. This gap is critical. Without a working business model, even the most promising concept struggles to grow or survive.
    In one case, we met a team with a working product but no business model, no one responsible for it, and no go-to-market plan. That was enough for us to decide not to move forward.
  • Market Size – In some cases, we’ve seen startups targeting small, very specific markets. Even if the product is innovative and the team is strong, a narrow market size raises questions: is there room to grow? Will follow-on capital come? The market doesn't need to be massive-but it needs to be meaningful.
  • From Vision to Execution – Many startups have inspiring visions. Our goal is to understand how that vision turns into reality. What are the first steps? What’s already been built? Are the team’s capabilities aligned with their goals? We’ve learned that a great idea with no path to execution often ends up staying just that-an idea.
  • Competition and Strategic Positioning – We’ve learned that both too little and too much competition can be red flags. In some cases, the absence of strong competitors made us question whether there was real demand for the product. In others, intense competition from well-funded players raised concerns about market entry barriers.
    The key is to find the right balance-and to clearly understand what gives our company an edge. That’s where value proposition becomes real: not just how good the product is, but how it stands out in a crowded or quiet market.

What Matters Just as Much as the Content?

  • Speak with the CEO – always. This is one of our non-negotiables. It may sound obvious, but there’s no substitute for direct interaction with the person leading the team. Especially in early-stage companies, things evolve fast. In multiple cases, a 30-minute call revealed updates that completely shifted our perspective-new partnerships, key hires, or even pivots we wouldn’t have known from the deck alone. These conversations often reveal what numbers can’t.
  • Validate Everything. We don’t just rely on what’s presented-we cross-check. Whether through LinkedIn, market reports, conversations with experts, or competitor mapping, we challenge the story. This isn’t to trip anyone up-it’s to build trust.
  • Work Together, Even When Researching Alone. Some of our best insights came from sharing thoughts within the team: reviewing SWOTs together, drafting joint questions, or just bouncing reactions off each other.

And in an Impact Fund-There’s One More Layer

At Maayan Fund, our mission goes beyond financial performance. As an impact-oriented venture fund, we are committed to investing in startups that generate meaningful social and environmental value-not as a side benefit, but as a core outcome.

That’s why, in addition to the traditional DD pillars, we always perform a parallel impact analysis. And we ask ourselves three critical questions:

  1. Net-Positive Impact – Does the company directly help improve social, environmental, or economic conditions in a meaningful way?
  2. Clear Measurements – Can we assess and track the impact using clear indicators-not just intentions?
  3. Impact Scaling – As the company scales, is it likely that its impact will scale as well-or might it get diluted?

We use clear frameworks to look at these questions, and if the impact isn’t strong enough-if it’s hard to see, measure, or grow-it naturally affects how we think about the investment.

In short, due diligence is the clearest mirror between what’s promised and what’s delivered. It’s not magic, and it’s not a checklist. It’s dialogue, research, and often-an honest connection. And at the end of the day, it’s through the tough questions that the best investment decisions are made. Especially when we aim not just for returns-but for impact that lasts.