This website is worth $100 Million. Why? Because I said so, so write the check already. The story of Ning follows.

First, to know me is to know that my sarcasm precedes me, so here we go with a little story. Here is how most people buy a car. They walk onto a car lot and say to a salesperson “Is this is a good car?” and the salesperson says “Why yes it is and you can get undercoating, it’s your lucky day” and of course the customer replies “sold”. Right? Wrong. You would first do some research on car types, brands, fuel economy, crash testing, etc. Otherwise known as “due diligence”.

Due diligence in the legal community typically means lots of work and billable hours, haha, it actually means looking under the covers to assure what one person is telling another is true. Due diligence in the VC (Venture Capital) community usually means the same, and can be the most important step in the process. The only individuals that do not like it are usually those not telling the truth. Everyone seems to believe it is a necessary evil but hate to waste time. However if it uncovers a key factor that will either kill a deal or lower an evaluation – it can be very useful.

In the Ning story read at Gawker here the accusation is that she (Gina Bianchini) provided false information for the due diligence and therefore the valuation was much higher than it should of been. That is a serious accusation, and if true means those that invested may have vastly overpaid.

Bottom line is that due diligence needs to be taken seriously. The process should be allowed to run its course, done by those with experience in the business and industry they are evaluating. Too many times due diligence is not done properly, by someone without the relevant experience to perform the diligence or too hastily. This may just be another example. If I were investing millions I would certainly have a vested interest in the due diligence.

As an entrepreneur or individual seeking investment for a company be sure that you present data properly.