Table 1
Significant Due Diligence Differences

BAs’
Mean

VCs’
Mean

BAs’
S/D*

VCs’
S/D*

P value^b

Size of firms funded
(corporate value)

£288,819

£3.2M

2,346K

5,505K

<0.001

Sector experience of
the investor^a

2.83

2.2

1.05

.93

<0.001

Sector research
conducted by investor^a

2.5

1.6

.97

.72

<0.001

Times met the entrepreneur before investing

5.4

9.5

5.61

7.88

<0.001

Number of independent
references taken on the
entrepreneur

.96

4.2

1.80

3.49

<0.001

Calculation of expected rates of return before
investing? (% yes)

31.6%

90.4%

.46

.29

<0.001

Documentation of the
investment process

—

—

—

—

More for VC (based on qualitative data)

Comprehensiveness of
business plan demanded

—

—

—

—

More for VC (based on qualitative data)

Cost of due diligence as a % of amount invested
(average)

.67%

1.3%

2.58

1.7

0.057

Number of people investor consulted before
investment decision

3.0

4.4

2.68

2.44

<0.001

Time from first meeting
entrepreneur to investment
decision (in weeks)

8.8

12.3

12.8

12.9

0.033

Total investment process time (weeks)

14.8

19.9

15.97

13.64

0.013