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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Is There Anything I Didn’t Ask You That I Should Be Asking?

Comments (35)

Recently I’ve been on the receiving end of a bunch of due diligence calls. Some of them are for companies I’m involved in, some are for entrepreneurs I’ve worked with in the past, and some are for other VCs I’ve worked with who are raising new funds. I view these differently than reference calls (I won’t do reference calls for anyone) – these are not about “employment”, they are about investment and a long term working relationship.

I experience two types of due diligence calls: (1) confirmatory calls and (2) investigative calls. The confirmatory calls result when someone has clearly made their decision and is just checking the box of “I’ve made my due diligence calls.” The investigative calls tend to be much more substance – these often happen well before a decision has been made and someone is in exploratory mode.

In most cases there is either a script or standard set of questions. The interesting calls are the ones where the person on the other end clearly knows how to interview or uses a method like five whys to really get at the core of something they are interested in. I especially enjoy the ones where the person on the other end of the phone is actively developing a relationship with me, rather than just collecting data.

But on many of the calls, there is a weird question at the end. It goes something like “Is there anything I didn’t ask you that I should be asking?” For a while I used to try to be polite and engage with the question. But at some point I realized it was a stupid question that someone included on a “how to do due diligence” form from 1961. So now I answer it simply with “nope.”

Here’s why I think it’s a stupid question. You are calling me for diligence on someone. Presumably you have specific things you are interested in. You’ve either done research on our previous relationship or you want me to fill you in on that. You then use this to pursue whatever line of questioning you have. If you are inquisitive and capable of reasoning, my answers will open up more questions. Eventually you will have enough information or will have reached a conclusion. If I’ve been doing my job I’ve been concentrating on answering your questions, not trying to follow your path of inquiry.

Now, while we are at the end of the inquiry, you ask me an open ended question in search of something magical. Maybe I’ll finally tell you the deep, dark, negative secret about the person that I’ve been withholding. Or I’ll come up with some incredible insight about the person that hadn’t come out in your previous line of questioning. I suppose this happens occasionally, and maybe it’s worth asking the question just on the off chance that something yummy will pop out. But I just find this an annoying way to end the conversion, so my answer from here on out is “nope.”

  • http://chipgriffin.com Chip Griffin

    I ask that question when I’m interviewing someone or talking to someone to research a company/person/issue/etc. Here’s why: 1) every so often the person I’m talking to does have something “yummy” pop out so it is worth the 90% pointless answers, and 2) I like to see how the individual handles the response, especially in job interview circumstances. That and other slightly more obscure/off-the-wall questions are useful to me in the employment process to see how someone’s mind works and how they handle the unexpected (in context with their other answers, of course).

    • http://www.feld.com bfeld

      I agree that it’s useful in a structured interview context.

      In this case I was talking about due diligence on another person,
      which is a case I don’t think is useful.

  • Kernjerome

    As a former auditor, I can attest to the power of this question. It is well worth sounding like an idiot asking the question, because many times, people are just itching to tell you something that you missed in your direct inquiry. I don’t know. Perhaps the question’s use in my context is different enough from yours that our experiences with it diverge to where I use it all the time now.

    • http://www.feld.com bfeld

      I guess I view an audit context as different than a due diligence context.

      In addition, auditors have a set of questions they have to ask. Having
      been on N (where N is a large number) audit committees, I can recite
      these questions from memory. And no – they generally don’t provide
      much new insight in a young private company context.

  • http://blog.3bigheads.com John Stack

    In a way, the other two commenters (Kern/Chip) were commenting from the perspective of the interviewer and not the interviewee.  Yours was from the interviewee.

    You know what I liked about your post?  It’s a no bullshit way of dealing with things – on more than one level: You’re focused on the questions and not the strategy of the caller – high value to the caller.  Also, you’re not pretending you’re a mind reader – high value to you and the caller.

    Callers/Interviewers should respect who they are calling/interviewing and not be so manipulative.  They should respect the fact that you’re doing them a favor.  

    • Anonymous

      that’s a great point that gets to the core of calls/meetings with people in general, position yourself and them in the highest value possible and structure the expectations/meeting around those points.

      it may seem elementary but in creating that context a lot of BS is eliminated.  it doesn’t mean the call is more or less formal–which people confuse with value/respect–it just means it has the focus and direction needed to drive the conversation in a productive direction.

  • http://freepository.com John Minnihan

    or you could just point them to this post

  • http://reecepacheco.com reecepacheco

    solid point, but i’ll argue that:

    1. there are enough people who will open up to an open-ended question to make it worth asking and 

    2. in a personal context, i like to ask “what else do you want me to know about you?”  it’s a different question, but it’s worth it.  some interview questions don’t let people really tell their story and this gives them a chance. same question, slightly different words. 

  • http://roberthackerbooks.com/ Robert Hacker

    No matter how skilled one is at interviewing or due diligence there is a tendency toward tunnel vision or excessive focus. Open ended questions such as you mention are one good way to protect against these risks. This question is particularly valuable in interviewing job candidates. 

    • http://www.feld.com bfeld

      I agree that this is a useful question in interviewing – if you use a
      structured interview approach – as it lets the person just riff about
      themselves. Recognize that there are other interview approaches – for
      example, I use a very different approach that has almost nothing to do
      with structured questions. My style is very freeform, follows the
      interviewee, and prompts him/her to go off in lots of random
      directions.

      However, I don’t think this question is useful in due diligence.

  • James Mitchell

    If a person does not ask this question, they are not doing their job.

    Assume I worked for you for six months, and I was a good employee. One year after I quit, I ax murdered six people, and you become aware of this. I got off on a technicality so I am now free, looking for a new job. You won’t hire me because Foundry Group has a hard core policy of not hiring ex-murderers.

    I apply to ABC Company, and when they call you they ask the right questions: Did I do a good job? Did I meet expectations? Did I work overtime when needed, etc.? You are truthfully answering their questions, and since I did a good job, your answers are favorable about me. For whatever reason — legal reasons, you still like me, you never liked the six people I axe murdered, you’re bored and you want to get off the phone call — you might not volunteer, “By the way, he axe murdered six people.”

    If the person asks the question you find annoying, it’s possible (I guess in your case quite likely) to say nope, but most people would probably say, “Look, he was a really good employee but after he quit working for us, I know for a fact he killed six people, you didn’t ask this question but I thought you might want to know this.”

    After reading this post, I am going to make absolutely certain I ask this annoying question in the future.

    • James Mitchell

      Far more annoying that this question are websites when you post a comment, you are now told you have some kind of stupid badge. Is there any way to turn that “feature” off. If I wanted some badges, I would join the Boy Scouts.

      • http://www.feld.com bfeld

        Come to my website, get a badge!

        Yes – there should be a way to turn this off. I’ll investigate.

        • James Mitchell

          Given my weak minded nature, I have been conned by the tech media to care about things I should not be thinking about, like how many friends I have on Facebook or LinkedIn, or that people are wasting their time tweeting. (I am such a sucker, I am even playing around with FourSquare, which could be useful if enough people use it.) But seriously, isn’t this going to far? What good is a badge going to do me? Do I get a certificate that I can put on my wall, and when people visit, they will be more impressed than photos of me with Presidents or degrees from major universities? As I mentioned to you in a private email, you’re got a very intelligent group of commenters on your website (more so than that other guy I mentioned). Can anyone of these people conceivably care about a badge?

          In the Stack Exchange sites, apparently a whole lot of people care about their reputation points. At least this makes a little bit of sense. A friend of mine was looking for a VB.Net guru and I told him to go look on that site for the guys with the 20 highest scores, and start with those as a hit list, and he ended up hiring a true guru. But a badge??

          To me, badges are total noise. Even worse than tweets.

          • James Mitchell

            So how do these badges work? Presumably there is a hierarchy, based on the number of comments? Is the hierarchy based just on commenting on your websites, or are other sites included? If I visit the Facebook page of someone who has commented on your site, I will see their badge?

            Again, I am really curious, do any of your readers care about this? If you had a site for 13 year old girls, badges could be great, but for your readership, I wonder.

          • http://www.feld.com bfeld

            If you get enough points (XP’s) you can get things. For example, click on BIGDEAL to see how you can get a signed copy of Do More Faster. Badges will get you things also once you earn enough of them.

            My implementation of the BigDoor minibar (www.bigdoor.com – one of the companies I’ve invested in) is very light weight – there’s a lot more coming in a few months.

          • James Mitchell

            I hope you did not invest a lot of money in Big Door!

            Seriously, though, there ought to be a way to turn the thing off.

          • http://www.feld.com bfeld

            I did invest in BigDoor. And I’m very happy with the investment so far. And there will be an easy way to turn it off in the future.

          • James Mitchell

            I love the way one can reply to comments on your website. I do not see that on many sites. Is that a function of disqus or another WordPress plugin?

          • http://www.feld.com bfeld

            That is a feature of Disqus.

    • http://www.feld.com bfeld

      If I knew someone had axe murdered six people, I would have responded
      to the interview request with “did you know the person axe murdered
      six people?” and pointed to the news report indicating this.

      Remember, I’m talking about a diligence request, not a reference
      request. I view them as very different things and explicitly said I
      won’t do reference requests.

      • James Mitchell

        I would love to hear:

        What is the difference between a diligence request and a reference request? There’s apparently a difference but the subtleties escape me.

        Why won’t you do reference requests? 

        I get these calls a lot less than you do, but when I do, for me a key determinant is, “Is the person calling a moron or not?” Some people outsource these types of questions to robots in India who are reading from a script. I am tempted to hand up on them but I don’t want to prejudice the person they are calling about (assuming I have a favorable impression of them).

        In general, my impression is that most people do not probe. I was sitting in a headhunters office and he took a call from someone he has been trying to reach. The questions asked by the headhunter were so scripted and superficial, I concluded at the meeting I would never use this guy.

        I think the other really important question is, “Who else know John Smith that I can call?” Anyone who is not a total idiot will give you references that say great things about them, and many of these people have already been coached by John Smith as to what to say and not say. But usually these people will tell you to call Joe Blow, who is not on John Smith’s list, and a lot of the time Joe Blow tells you all kinds of things that John Smith did not want you to know.

        • http://www.feld.com bfeld

          Diligence request = someone is considering investing in a company.

          Reference request = someone is considering hiring someone.

          Re: off-sheet references – I think the question “who else know John Smith that I can call?” is a lazy question. If you really want off-sheet references, you should hunt them down completely independently. It’s really easy and that’s where the real reference / diligence information comes from.

          • James Mitchell

            So why won’t you do reference requests?

            As for lazy questions. To me, lazy is often the right approach, if you define lazy as accomplishing something with the least amount of effort. I like to watch people doing that because sometimes I learn by watching them.

          • http://www.feld.com bfeld

            I get too many requests for them. Rather than be selective (which negatively biases people I won’t do calls for) I’ve decided to have a blanket policy not to do them.

  • http://david.ulevitch.com/ Anonymous

    I typically end both diligence and reference calls the exact same way — I summarize what I’ve taken away from their answers then I ask them if they think it’s an accurate representation of their responses and if they have anything they’d like to clarify, add or change.

    I’m not looking for anything magical, but I know I almost always have a bias with my diligence questions and sometimes that can cause me to misinterpret their responses or color them incorrectly.

  • Rcrutch@mac.com

    Generally, I find your blogs informative and thoughtful, but took exception today. An open ended question, particularly the one referenced, displays a level of humility by the questioner that no one knows all, regardless of preparation level. It allows for the party being questioned the latitude to provide clarity and transparency around questions that should have been asked, and weren’t, or to provide missed context that is linked to personal experience and/or knowledge the interviewee now has the free range to insert. In my 30 years of experience as an entrepreneur, senior corporate executive and, now, venture capitalist, good reference calls that are dialogues generate much more clarity, depth and understanding.

    Thanks for writing a thought and response provoking blog. Even though we disagree on this point, I greatly enjoy reading your posts and find them very informative and stimulating.

    • http://www.feld.com bfeld

      Thanks for weighing in! I agree that a dialogue is much more valuable
      than a series of questions and answers. That’s why when I do reference
      calls I always try to engage in a real conversation, rather than just
      ask a bunch of questions. I guess in my experience I find the final
      “catch all question” to be one that comes at then end of a Q&A, rather
      than a dialogue.

  • http://paul.kedrosky.com Paul Kedrosky

    I get this question constantly from media people, and it drives me mad. I used to take it seriously and try to engage (“Well, I guess there’s this…”); and then I began messing about (“Everything I told you in this call was made up!”). Now, however, I just say “No, there isn’t”. 

  • http://www.facebook.com/zsultan Ziad Sultan

    Since “I don’t know what I don’t know”, I think there is value in engaging the other person on the questions themselves and not just the answers.

    However, the way I do it, rather than ask that one question at the end, is to give as much context as possible to the other person upfront (who I am, what I know, what I am trying to achieve…). Then I ask for their opinion on whether they think I am going about it the right way. That is an invitation for the interviewee to put themselves in my shoes, and conversations are often more productive that way.

  • http://www.totaltab.com Nick Reuter

    I think open ended questions are good, but I’m sure like you say the value of that question is pretty pointless. It makes me think of usability on a site – do you really need that box that says “How did you hear about us”?. It’s a CYA kind of question that really doesn’t CYA at all. 

    My pet peeve is when you get on a phone system and it says “Please listen carefully as our menu system has changed”. I just can’t stand wasting time listening to that statement. It doesn’t provide anything of value to anyone and you know that everyone is doing just because it’s the popular thing to do on your phone lines. Lame. 

    I think an open ended discussion on the end would be much more suitable. Like, what are some of our concerns about XX or YY. Although that may have already been covered earlier in the discussion. 

  • Rich

    It took me a bit to come up with the underlying business rule of thumb for this post. But, it turned out to be: Focus on being efficient and effective.

    The calls your gonna’ say a blanket “nope” on, are calls you really don’t care about and are not of value as an interviewee. You’re not focused, you’re not genuine, you’re not having a conversation. You’re just being used. It would be best for not only you but also for the interviewer if you didn’t even take the call.

    Don’t get me wrong. Meeting people and talking with people is the greatest thing to spend time on. But, if you’re taking calls that aren’t about building a relationship then your just wasting time. One caveat is some people will sound unprepared on phone calls. Those are probably the most genuine people of all. Those people are not using a script. They are genuine.

  • Todd Vernon

    Interesting.. I ask it all the time and love it when I get the question. To me, it’s open-door to communicate what I think, in the way I want to. If I’m positive I use it that way. If I’m negative, same.

    I’m completely opposite on this. For me, it my favorite question :-)

  • http://thesistown.com/ buy thesis

    hm… interesting) thanks!

  • Eddie Walker

    In the due diligence context where someone is asking you about a company you are affiliated with, there are certainly the positive implications noted above, but the more sinister motivation for the question is as a legal CYA.  In a due diligence context, failing to disclose material information (even when the line of questioning to which you were subjected never touched on or even hinted at the issue) could be construed as misrepresentation or even fraud.  The implication of the question is therefore also a means for the questioner to ferret out whether you are holding back (intentionally or unintentionally) material information about this company. 

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