Run a Mini-FMEA on Diligence Risk
Use a lightweight FMEA to prioritize startup diligence risks by severity, occurrence, and detection.
Ken must decide which diligence risk to investigate before wiring. Mini-FMEA = failure mode x effect x severity x occurrence x detection. The common trap is chasing the most emotionally salient risk instead of the risk that is severe, plausible, and hard to detect later. List failure modes Data rights unclear; customer concentration high; founder lacks sales leader; burn higher than plan. A failure mode is a specific way the investment thesis could break. Score severity Data rights = 5 because it could block the product; customer concentration = 4; sales leader gap = 3. Severity asks how damaging the…
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