Diligence Sequencing

Diligence Sequencing defines the step-by-step order that an allocator uses to evaluate a manager: initial screen → deep research → DDQ → ODD → risk review → IC memo → IC vote → legal/terms → subscription execution. The sequencing varies by allocator type and risk profile, but sequencing discipline is a major predictor of conversion speed and late-stage drop-offs.

Sequencing is not about “doing everything.” It’s about doing the gating work at the right time. A common failure pattern is pushing legal and ODD too late, so veto gates appear after the IC is psychologically committed. Another failure pattern is running heavyweight ODD too early on low-fit opportunities, wasting time and creating fatigue.

How allocators define sequencing risk drivers

Allocators evaluate sequencing through:

• Gate definition: what must be true before moving forward
• ODD timing: early enough to prevent surprises, late enough to avoid waste
• Legal timing: when terms are assessed relative to conviction building
• Risk review integration: whether risk is parallel or sequential
• IC memo readiness: evidence maturity before IC calendar deadlines
• Documentation maturity: data room readiness early vs drip-fed documents
• Escalation triggers: when issues force re-sequencing or re-approval

Allocator framing:
“Are we sequencing to reduce uncertainty early—or sequencing for convenience and discovering blockers late?”

Where sequencing matters most

• first-time managers where ODD and legal scrutiny are heavy
• complex strategies and structures
• short fundraising timelines and hard closes
• organizations with infrequent IC calendars

How sequencing changes outcomes

Strong sequencing discipline:

• reduces late-stage diligence drop-off
• improves speed and predictability
• increases confidence in IC discussions
• lowers governance fatigue and wasted work

Weak sequencing discipline:

• creates late veto surprises
• increases re-litigation and repeated diligence
• produces conditional approvals that stall
• lowers conversion and increases negative signaling

How allocators evaluate discipline

Confidence increases when allocators:

• run early fit screens before heavy work
• introduce veto functions early with clear requirements
• align sequencing to IC memo deadlines
• keep evidence standards consistent throughout

What slows decision-making

• unclear gates and shifting order
• missing documents until late
• ODD/legal treated as afterthoughts
• IC calendars missed due to sequencing delays

Common misconceptions

• “Everyone sequences the same” → sequencing is governance-specific.
• “ODD is always last” → that’s how late-stage surprises happen.
• “Legal is just paperwork” → terms can be a primary blocker.

Key allocator questions during diligence

• What is the standard gate plan and why?
• When do ODD and legal enter the process for this risk profile?
• What must be true before IC scheduling?
• How do you prevent late-stage surprises?
• What changes the sequence (red flags, terms, staffing)?