I've been through more VC meetings than I care to count. Many self select out fairly early in the process (see Me and VC). But the ones that keep going have a responsibility to the fund to check out all nooks and crannies of your business. This is typically called "Due Diligence". It starts out high level and becomes increasingly invasive until satisfactorily completed. The spin on this is that these events lift you up out of the day to day and force you to pause and put together some very good documentation, which in turn makes causes you to think more critically about your business.
I thought I'd pass along a recent DD checklist from one of the many VCs we've been engaged with. This is a fairly thorough list, but gives you an idea what to prepare for ... and it is good to be prepared as BF writes in his blog on Don't be Casual.
This one is skewed more to the tech/ops area. Others would drill more into sales pipeline and financials.
1. A review of the technology model.
2. Architecture and Infrastructure. Please supply detailed architecture diagrams. Include, software, security, database, network, ISP connection, etc.
3. Scalability and Availability. Related architecture and processes. What testing has been done? Monitoring? Failover, etc.
4. Customer Installation and Set Up. Review process, etc
5. Management and Administrative Systems. Describe the support systems you have to run the business (e.g. billing)
6. Security and Privacy. Processes and system review.
7. Information Delivery. Review processes and procedures around email and other types of delivery to customers.
8. Backup and Disaster Recovery.
9. Application Development Processes
10. Third Party relationships.
11. Title / Ownership of assets such as software.
12. Management and Organization. Please supply technology and operation groups org charts. I will will probably want to briefly sit down with a couple key people.
13. IP. Supply complete patent applications.
14. Technology costs. Technology related expenses last year and expected for this year.
15. Technology road map review.
16. Manual Operations walk thru. A day in the life of operations.
17. Operations procedures. Anything documented?