Due Diligence is the process that allows you to understand your investment target better. While in some cases, it might be possible to assess the company based on the financial parameters only, in many areas, like pharma, biotech, and deeptech, this becomes much harder. Impossible, in fact. 

Most of the start-ups in these areas would not generate revenue in the first 3 to 4 years while requiring significant investments. 

The worst thing is that VC funds, Family Offices and other investment players, might not possess the right level of analytics to decide whether a given investment is expedient. This leads to ineffective allocation, an overheated market, and problems with fundraising.