Be careful of DD done prior to a term sheet, as it allows the VCs to retain optionality on your company in a way that is pretty cheap for them and very expensive for you. Arranged calls with bizdev and customer prospects from a VC's rolodex looks like progress but doesn't necessarily mean anything.

I'd love to know how people who are good at this qualify VC prospects and decide what kinds of up-front due diligence to acquiesce to.