Whether you are raising a round of funding or looking at a potential acquirer, the due diligence process can be either smooth sailing or extremely painful. It depends upon how prepared you are and just how deep your investors want to go.
I know I have personally been through an extremely painful due diligence process when I sold a company to a public company. But I know it could have been easier if I were better prepared.
I recently sat in a session run by Gwen Edwards (an angel investor and representative of Golden Seeds) where she talked about how wonderful it was when someone showed up at their pitch with their due diligence package already prepared. This made me want to collaborate with Gwen on the contents of a good due diligence package. We started a list on a google doc and then I was inspired to create this LiveBinder as a template package from that work: