The due diligence questionnaire (DDQ) is an industry-standard form that many LPs, especially the larger institutional ones, may use to quickly cross-compare and answer typical questions that arise in their diligence process. Many of the questions in the document may also be answered elsewhere in your data room. Think of this as a summary guide and a good final step to sanity check that you have everything in order for your fundraise. You can also think of it as a living document. As you progress in your fundraise and get new questions from prospective LPs, consider continuing to add common responses into it.
What matters most to LPs?
Ease of analysis.
Depending on the type of LP you’re speaking with, they may have met with hundreds of funds this year. The DDQ may be the best standardized tool for them to quickly cross-compare at a high level.
Completeness.
LPs may expect there to be gaps in the data you’re providing here but anticipate speaking to any holes in the data. Also consider continuing to update the data as you go.
Alignment with your other documents.
Consider ensuring the information included in your DDQ reflects the same information included elsewhere. In addition, consider checking that all the key information in your pitch deck and track record matches.
A note on private placement memorandums (PPMs): Consider working with your legal counsel to determine if you need to create a PPM as part of your fund documentation. They are no longer common for emerging managers, but they are still required for some firm structures.
Think of your DDQ as a living document. As you progress in your fundraise and get new questions from prospective LPs, continue to add common responses into it.
Natalie Fratto
Manager Director, SVB Emerging Manager Practice
Resources
Review a Due Diligence Questionnaire Template by Institutional Limited Partnership Association (ILPA)
