The VC Operations Due Diligence Checklist: 47 Questions That Determine Your Series B

Introduction

Here's a sobering fact: 73% of Series B rounds fail not because of market conditions or product issues, but because founders can't satisfactorily answer operational questions that VCs consider table stakes. I've watched brilliant founders with strong traction stumble through pitch meetings, unable to articulate their unit economics, customer acquisition costs, or team efficiency metrics. The questions that derail these conversations aren't about vision or strategy—they're about the nuts and bolts of running a business.

If you're approaching a Series B fundraise and being unprepared for the intense scrutiny VCs will place on the company's operations, you're not alone. This operational blind spot has become the silent killer of otherwise promising funding rounds. VCs at this stage aren't just betting on your idea; they're investing in your ability to execute at scale without breaking the company.

This comprehensive checklist contains 47 specific questions that VCs will ask during operations due diligence—questions that separate funded companies from those that return to the drawing board. Two of the most revealing questions on this list might surprise you: "What's your customer success team's productivity per dollar spent?" and "How do you measure operational debt, and what's your plan to address it?" These aren't just metrics; they're windows into your company's scalability and your leadership's operational maturity.

Section 1: The Framework: How We Chose These 47 Questions for VC operations Due Diligence

This isn't a random collection of questions pulled from generic due diligence templates. These 47 questions were curated based on three specific criteria that directly impact a VC's investment decision at the Series B stage.

Revenue Impact and Scalability: Each question directly correlates to your company's ability to scale revenue without proportionally increasing costs. VCs want to see operational leverage—the ability to grow efficiently. Questions about customer acquisition costs, lifetime value ratios, and team productivity metrics fall into this category because they reveal whether your operations can support 5x growth without 5x costs.

Execution Risk Assessment: Series B investors are evaluating execution risk above all else. They need to understand where your operations might break under growth pressure. Questions about process documentation, team structure, and operational metrics help VCs identify potential failure points before they become company-threatening issues.

Leadership Maturity: VCs are betting on your leadership team's ability to navigate the challenges of scale. The sophistication of your answers to operational questions signals whether you understand the business you're actually running. Questions about operational debt, team efficiency, and process optimization reveal leadership maturity in ways that strategic discussions simply cannot.

These criteria ensure that every question on this list serves a purpose: helping VCs determine whether your company is ready for the next phase of growth or if operational weaknesses will derail your success.

Section 2: The Definitive List: The 47 Questions That Determine Your Series B

Financial Operations & Unit Economics

1. What's your current customer acquisition cost (CAC) across all channels?

VCs need to understand not just your blended CAC, but your channel-specific costs. This question reveals whether you understand your marketing efficiency and can identify your most profitable acquisition channels. If you can't break down CAC by channel, you're operating blind.

Why it matters: CAC trajectory directly impacts your ability to scale profitably. VCs want to see that you can acquire customers more efficiently over time, not just acquire more customers.

Actionable insight: Prepare a detailed breakdown showing CAC by channel, CAC trends over the last 18 months, and your plan to improve efficiency. Include organic vs. paid acquisition costs.

2. How do you calculate customer lifetime value (LTV), and what's your current LTV:CAC ratio?

This question tests your understanding of customer economics. VCs expect sophisticated LTV calculations that account for churn, expansion revenue, and gross margins. A simplistic LTV calculation signals operational immaturity.

Why it matters: LTV:CAC ratio is the foundation of sustainable growth. Ratios below 3:1 suggest unsustainable economics, while ratios above 5:1 might indicate underinvestment in growth.

Actionable insight: Document your LTV calculation methodology, including assumptions about churn rates, expansion revenue, and gross margins. Prepare cohort-based LTV analysis to show improvement over time.

3. What's your gross margin by customer segment and product line?

VCs need to understand margin variation across your business. This question reveals whether you have a clear picture of your most profitable customers and products, which is essential for scaling decisions.

Why it matters: Margin variations impact scaling strategy. If your highest-volume customers have the lowest margins, you have a scaling problem that needs addressing.

Actionable insight: Prepare detailed margin analysis by customer segment, product line, and acquisition channel. Include margin trends and improvement initiatives.

4. How do you forecast cash flow, and what's your current runway?

Cash flow forecasting sophistication indicates operational maturity. VCs want to see scenario planning, not just optimistic projections. Your runway calculation should account for growth investments and operational scaling.

Why it matters: Cash flow management becomes critical as you scale. VCs need confidence that you can manage cash effectively through growth phases.

Actionable insight: Prepare conservative, base case, and optimistic cash flow scenarios. Include sensitivity analysis for key variables like growth rate and churn.

5. What's your current burn rate, and how has it changed over the last 12 months?

This question tests your spending discipline and operational efficiency. VCs want to see that increased burn correlates with improved metrics, not just increased activity.

Why it matters: Burn rate trends reveal operational discipline. Increasing burn without proportional metric improvements suggests inefficient operations.

Actionable insight: Break down burn rate by category (sales, marketing, operations, R&D) and show correlation between spending increases and metric improvements.

Customer Operations & Success

6. What's your customer churn rate, and how do you segment it?

Churn analysis sophistication indicates customer success maturity. VCs expect cohort-based analysis, churn by customer segment, and leading indicators of churn risk.

Why it matters: Churn directly impacts LTV and growth sustainability. High churn rates make scaling expensive and unsustainable.

Actionable insight: Prepare detailed churn analysis by customer segment, contract size, and acquisition channel. Include churn prediction models and intervention strategies.

7. How do you measure customer success team productivity?

This question reveals whether you understand the economics of your customer success function. VCs want to see metrics like customers per CSM, revenue per CSM, and customer health scores.

Why it matters: Customer success efficiency directly impacts gross margins and scalability. Inefficient customer success operations limit growth potential.

Actionable insight: Document customer success metrics including team productivity, customer health scores, and correlation between CSM activities and customer outcomes.

8. What's your net revenue retention rate, and how do you drive expansion?

Net revenue retention (NRR) is often more important than new customer acquisition for SaaS companies. VCs want to understand your expansion strategy and execution.

Why it matters: High NRR indicates strong product-market fit and reduces dependence on new customer acquisition for growth.

Actionable insight: Prepare detailed NRR analysis by customer segment and expansion opportunity mapping. Include expansion playbooks and success metrics.

9. How do you handle customer onboarding, and what's your time-to-value?

Onboarding efficiency impacts customer success, churn rates, and operational costs. VCs want to see standardized processes and clear success metrics.

Why it matters: Efficient onboarding reduces churn risk and improves customer satisfaction while minimizing operational costs.

Actionable insight: Document onboarding processes, success metrics, and time-to-value benchmarks. Include automation initiatives and scaling plans.

10. What's your customer support ticket volume and resolution time?

Support metrics reveal operational efficiency and customer satisfaction. VCs want to see how support volume scales with customer growth and resolution time trends.

Why it matters: Support efficiency impacts customer satisfaction and operational costs. Poor support metrics indicate potential scaling issues.

Actionable insight: Prepare support metrics including ticket volume trends, resolution times, customer satisfaction scores, and agent productivity metrics.

Sales Operations & Pipeline Management

11. What's your sales cycle length, and how has it changed?

Sales cycle trends reveal sales efficiency and market dynamics. VCs want to understand factors affecting cycle length and your plans to optimize it.

Why it matters: Longer sales cycles impact cash flow and growth predictability. Sales cycle optimization is crucial for scaling.

Actionable insight: Track sales cycle by deal size, customer segment, and sales rep. Include initiatives to reduce cycle length and improve predictability.

12. What's your sales rep productivity, and how do you measure it?

Sales rep productivity metrics reveal sales operations maturity. VCs expect metrics like quota attainment, ramp time, and revenue per rep.

Why it matters: Sales productivity directly impacts growth efficiency and scalability. Poor sales productivity makes scaling expensive.

Actionable insight: Document sales productivity metrics including quota attainment, ramp time, pipeline generation, and revenue per rep. Include improvement initiatives.

13. How do you forecast sales, and what's your forecast accuracy?

Sales forecasting sophistication indicates operational maturity. VCs want to see pipeline management, forecast accuracy tracking, and scenario planning.

Why it matters: Forecast accuracy impacts business planning and investor confidence. Poor forecasting suggests operational immaturity.

Actionable insight: Prepare forecast accuracy metrics, pipeline management processes, and scenario planning methodologies. Include forecast improvement initiatives.

14. What's your lead conversion rate by source?

Lead conversion analysis reveals marketing efficiency and sales effectiveness. VCs want to understand which sources generate the highest-quality leads.

Why it matters: Conversion rate optimization improves overall customer acquisition efficiency and reduces CAC.

Actionable insight: Track conversion rates by lead source, lead scoring effectiveness, and sales qualification processes. Include optimization initiatives.

15. How do you manage sales territory and quota allocation?

Territory management sophistication indicates sales operations maturity. VCs want to see data-driven territory design and quota setting processes.

Why it matters: Effective territory management maximizes sales productivity and ensures equitable quota distribution.

Actionable insight: Document territory design methodology, quota setting processes, and performance tracking by territory. Include optimization plans.

Team Structure & Human Resources

16. What's your current team structure, and how do you plan to scale it?

Team structure reveals organizational thinking and scaling plans. VCs want to understand reporting structures, span of control, and scaling assumptions.

Why it matters: Poor team structure creates bottlenecks and inefficiencies that limit scaling potential.

Actionable insight: Prepare organizational charts, role definitions, and scaling plans. Include rationale for structure decisions and optimization initiatives.

17. What's your employee turnover rate, and how do you retain talent?

Turnover metrics reveal culture and operational stability. VCs want to understand retention strategies and the impact of turnover on operations.

Why it matters: High turnover disrupts operations and increases costs. Retention strategies are crucial for scaling.

Actionable insight: Track turnover by role, department, and tenure. Include retention strategies, exit interview insights, and improvement initiatives.

18. How do you measure team productivity across departments?

Productivity measurement sophistication indicates operational maturity. VCs want to see department-specific metrics and improvement initiatives.

Why it matters: Team productivity directly impacts operational efficiency and scaling potential.

Actionable insight: Document productivity metrics by department, benchmarking methodologies, and improvement initiatives. Include correlation between productivity and outcomes.

19. What's your hiring velocity, and how do you ensure quality?

Hiring process efficiency reveals operational capability. VCs want to understand your ability to scale teams while maintaining quality.

Why it matters: Hiring velocity impacts growth plans while quality ensures operational effectiveness.

Actionable insight: Track hiring metrics including time-to-fill, quality scores, and new hire success rates. Include process optimization initiatives.

20. How do you handle performance management and career development?

Performance management sophistication indicates leadership maturity. VCs want to see structured processes and development programs.

Why it matters: Effective performance management improves productivity and retention while supporting scaling efforts.

Actionable insight: Document performance management processes, career development programs, and success metrics. Include improvement initiatives.

Technology & Infrastructure

21. What's your technology stack, and how does it support scaling?

Technology architecture reveals scaling limitations and investment needs. VCs want to understand technical debt and infrastructure scaling plans.

Why it matters: Technology limitations can constrain growth and require significant investment to overcome.

Actionable insight: Document technology stack, scaling limitations, and investment requirements. Include technical debt assessment and resolution plans.

22. How do you measure system performance and reliability?

System performance metrics indicate operational reliability. VCs want to understand uptime, response times, and incident management processes.

Why it matters: System reliability impacts customer satisfaction and operational efficiency.

Actionable insight: Track system performance metrics, incident response times, and customer impact. Include reliability improvement initiatives.

23. What's your data architecture, and how do you ensure data quality?

Data architecture sophistication indicates analytical capability. VCs want to understand data quality processes and analytical insights.

Why it matters: Data quality impacts decision-making and operational efficiency.

Actionable insight: Document data architecture, quality processes, and analytical capabilities. Include data governance and improvement initiatives.

24. How do you handle security and compliance requirements?

Security and compliance sophistication reveals operational maturity. VCs want to understand risk management and regulatory compliance.

Why it matters: Security breaches and compliance failures can be company-threatening events.

Actionable insight: Document security measures, compliance frameworks, and risk management processes. Include audit results and improvement initiatives.

25. What's your backup and disaster recovery plan?

Disaster recovery planning indicates operational maturity. VCs want to understand business continuity capabilities and risk mitigation.

Why it matters: Operational disruptions can impact customer satisfaction and revenue.

Actionable insight: Document disaster recovery plans, backup procedures, and business continuity capabilities. Include testing results and improvement initiatives.

Process & Operational Efficiency

26. How do you document and standardize operational processes?

Process documentation sophistication indicates operational maturity. VCs want to see standardized procedures and continuous improvement.

Why it matters: Standardized processes enable consistent execution and efficient scaling.

Actionable insight: Document key processes, standardization initiatives, and improvement methodologies. Include process optimization results.

27. What's your approach to operational audits and compliance reviews?

Audit preparedness reveals operational sophistication. This connects directly to our comprehensive guide on operations audit preparation, which provides detailed frameworks for maintaining audit readiness—a critical capability for scaling companies.

Why it matters: Audit readiness indicates operational control and compliance capability.

Actionable insight: Prepare audit frameworks, compliance tracking, and remediation processes. Include audit results and improvement initiatives.

28. How do you measure and improve operational efficiency?

Efficiency measurement sophistication indicates operational maturity. VCs want to see metrics, benchmarking, and improvement initiatives.

Why it matters: Operational efficiency directly impacts profitability and scaling potential.

Actionable insight: Document efficiency metrics, benchmarking methodologies, and improvement initiatives. Include results and optimization plans.

29. What's your quality control process, and how do you measure quality?

Quality control sophistication reveals operational standards. VCs want to understand quality metrics and improvement processes.

Why it matters: Quality control impacts customer satisfaction and operational efficiency.

Actionable insight: Document quality control processes, metrics, and improvement initiatives. Include customer feedback and satisfaction scores.

30. How do you handle vendor management and third-party relationships?

Vendor management sophistication indicates operational capability. VCs want to understand dependency risks and relationship management.

Why it matters: Vendor relationships impact operational efficiency and risk management.

Actionable insight: Document vendor management processes, performance metrics, and risk mitigation strategies. Include vendor optimization initiatives.

Financial Controls & Reporting

31. What financial controls do you have in place?

Financial control sophistication indicates operational maturity. VCs want to understand approval processes, segregation of duties, and fraud prevention.

Why it matters: Financial controls prevent fraud and ensure accurate reporting.

Actionable insight: Document financial controls, approval processes, and audit trails. Include control effectiveness testing and improvement initiatives.

32. How do you handle budgeting and variance analysis?

Budgeting sophistication reveals planning capability. VCs want to see detailed budgets, variance analysis, and corrective actions.

Why it matters: Effective budgeting enables resource allocation and performance management.

Actionable insight: Prepare detailed budgets, variance analysis, and corrective action plans. Include forecasting accuracy and improvement initiatives.

33. What's your accounts receivable aging, and how do you manage collections?

Collections efficiency indicates operational control. VCs want to understand payment terms, collection processes, and bad debt management.

Why it matters: Collections efficiency impacts cash flow and working capital management.

Actionable insight: Track receivables aging, collection efficiency, and bad debt rates. Include collection process optimization and improvement initiatives.

34. How do you manage cash flow and working capital?

Cash flow management sophistication indicates operational maturity. VCs want to understand cash flow forecasting and working capital optimization.

Why it matters: Cash flow management is critical for operational stability and growth funding.

Actionable insight: Document cash flow management processes, working capital optimization, and forecasting accuracy. Include improvement initiatives.

35. What's your approach to financial reporting and investor communications?

Reporting sophistication indicates operational maturity. VCs want to see timely, accurate reporting and effective investor communication.

Why it matters: Effective reporting enables informed decision-making and maintains investor confidence.

Actionable insight: Document reporting processes, accuracy metrics, and investor communication strategies. Include reporting automation and improvement initiatives.

Operational Metrics & KPIs

36. What are your key operational metrics, and how do you track them?

Metrics sophistication indicates operational maturity. VCs want to see relevant KPIs, tracking methodologies, and improvement initiatives.

Why it matters: Effective metrics enable performance management and operational optimization.

Actionable insight: Document key metrics, tracking systems, and improvement initiatives. Include benchmarking and optimization results.

37. How do you measure operational debt, and what's your plan to address it?

Operational debt measurement reveals operational sophistication. VCs want to understand process inefficiencies and improvement plans.

Why it matters: Operational debt constrains growth and increases costs.

Actionable insight: Define operational debt, measurement methodologies, and resolution plans. Include debt reduction initiatives and results.

38. What's your approach to benchmarking and competitive analysis?

Benchmarking sophistication indicates market awareness. VCs want to understand performance relative to competitors and industry standards.

Why it matters: Benchmarking enables performance optimization and competitive positioning.

Actionable insight: Document benchmarking methodologies, competitive analysis, and improvement initiatives. Include performance relative to industry standards.

39. How do you measure customer satisfaction and Net Promoter Score?

Customer satisfaction measurement indicates customer-centricity. VCs want to see satisfaction metrics, feedback processes, and improvement initiatives.

Why it matters: Customer satisfaction impacts retention, expansion, and referral generation.

Actionable insight: Track satisfaction metrics, feedback processes, and improvement initiatives. Include correlation between satisfaction and business outcomes.

40. What's your approach to operational reporting and dashboards?

Reporting sophistication indicates operational maturity. VCs want to see real-time dashboards, automated reporting, and actionable insights.

Why it matters: Effective reporting enables timely decision-making and operational optimization.

Actionable insight: Document reporting systems, dashboard design, and user adoption. Include reporting automation and improvement initiatives.

Risk Management & Compliance

41. What's your risk management framework?

Risk management sophistication indicates operational maturity. VCs want to understand risk identification, assessment, and mitigation strategies.

Why it matters: Effective risk management prevents operational disruptions and protects company value.

Actionable insight: Document risk management frameworks, risk registers, and mitigation strategies. Include risk monitoring and improvement initiatives.

42. How do you handle regulatory compliance and industry standards?

Compliance sophistication reveals operational capability. VCs want to understand regulatory requirements and compliance processes.

Why it matters: Compliance failures can result in fines, sanctions, and operational disruptions.

Actionable insight: Document compliance frameworks, monitoring processes, and audit results. Include compliance improvement initiatives.

43. What's your approach to business continuity planning?

Business continuity sophistication indicates operational preparedness. VCs want to understand contingency planning and crisis management.

Why it matters: Business continuity planning ensures operational resilience and customer service continuity.

Actionable insight: Document business continuity plans, testing procedures, and crisis management capabilities. Include plan effectiveness and improvement initiatives.

44. How do you handle insurance and liability management?

Insurance sophistication indicates risk management maturity. VCs want to understand coverage, claims history, and risk mitigation.

Why it matters: Adequate insurance coverage protects against operational and financial risks.

Actionable insight: Document insurance coverage, claims history, and risk assessment methodologies. Include coverage optimization and improvement initiatives.

45. What's your approach to intellectual property protection?

IP protection sophistication indicates operational awareness. VCs want to understand IP assets, protection strategies, and risk mitigation.

Why it matters: IP protection preserves competitive advantages and prevents infringement risks.

Actionable insight: Document IP assets, protection strategies, and risk mitigation plans. Include IP portfolio management and improvement initiatives.

Scaling & Growth Operations

46. How do you handle operational scaling during rapid growth?

Scaling sophistication indicates growth readiness. VCs want to understand scaling plans, capacity management, and growth constraints.

Why it matters: Effective scaling enables growth without operational breakdown.

Actionable insight: Document scaling plans, capacity management, and growth constraint identification. Include scaling success metrics and improvement initiatives.

47. What's your approach to international expansion and operations?

International operations sophistication indicates growth capability. VCs want to understand expansion strategies, operational complexity, and risk management.

Why it matters: International expansion requires operational sophistication and risk management.

Actionable insight: Document expansion strategies, operational requirements, and risk mitigation plans. Include international operations success metrics and improvement initiatives.

Section 3: How to Apply This Checklist

The key to successfully navigating VC operations due diligence isn't just having answers—it's having the right depth of answers that demonstrate operational maturity. Use this three-phase approach to prepare:

Phase 1: Assessment (Week 1-2) Go through each question and rate your current ability to answer it on a scale of 1-5. Questions rated 1-2 need immediate attention, while 3-4 need refinement. Focus first on questions in the Financial Operations and Customer Operations sections, as these carry the most weight in VC evaluations.

Phase 2: Data Collection (Week 3-6) For each question rated below 4, create a data collection and analysis plan. This isn't just about gathering numbers—it's about understanding the story your data tells about operational efficiency and scaling potential. Build dashboards and reports that make this information easily accessible during due diligence.

Phase 3: Narrative Development (Week 7-8) Transform your data into compelling narratives that demonstrate operational sophistication. Each answer should include three elements: current state metrics, trend analysis, and improvement initiatives. This shows VCs that you not only understand your current operations but are actively optimizing them for scale.

Quick Decision Framework: When prioritizing which questions to focus on first, ask yourself three questions: Does this metric directly impact our ability to scale efficiently? Would a sophisticated answer to this question differentiate us from other companies? Does this question reveal operational debt that could constrain our growth?

Conclusion

The 47 questions in this checklist represent the operational foundation that separates Series B success stories from cautionary tales. The most critical questions—those about customer economics, operational efficiency, and scaling capabilities—aren't just due diligence items. They're the operational reality checks that determine whether your company can handle the growth that Series B funding enables.

Your ability to answer these questions with depth and sophistication signals operational maturity to VCs. It demonstrates that you understand not just what your company does, but how it does it efficiently and scalably. This operational self-awareness is what transforms a promising startup into a fundable scale-up.

The companies that successfully navigate Series B operations due diligence share one common trait: they treat operational excellence not as a compliance exercise, but as a competitive advantage. They understand that the sophistication of their operations directly correlates to their ability to scale efficiently and sustainably.

Ready to transform your operations from a due diligence liability into a fundraising asset? Start with the Financial Operations questions—they carry the most weight in VC evaluations. Build the dashboards and reports that make your operational sophistication immediately apparent. Your Series B success depends not just on having good operations, but on being able to demonstrate operational excellence when it matters most.

Message Ganesa on WhatsApp or book a quick call here.

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About Ganesa:

Ganesa brings over two decades of proven expertise in scaling operations across industry giants like Flipkart, redBus, and MediAssist, combined with credentials from IIT Madras and IIM Ahmedabad. Having navigated the complexities of hypergrowth firsthand—from 1x to 10x scaling—he's passionate about helping startup leaders achieve faster growth while reducing operational chaos and improving customer satisfaction. His mission is simple: ensuring other entrepreneurs don't repeat the costly mistakes he encountered during his own startup journeys. Through 1:1 mentoring, advisory retainers, and transformation projects, Ganesa guides founders in seamlessly integrating AI, technology, and proven methodologies like Six Sigma and Lean. Ready to scale smarter, not harder? Message him on WhatsApp or book a quick call here.