Everyone writes financial DD. Everyone writes technical DD. “People DD” is a sales page term — you’ll find it on every executive search firm’s website and in no investment committee’s actual process. The reason is that the term has no framework behind it. What does it mean to “assess the people”? Check references? Run a personality assessment? Ask the founder if they’re coachable? None of these evaluate the structural layer that actually determines whether the team delivers: the decision graph.
People DD, done structurally, evaluates whether the organisation — not the individuals in it — can convert the capital you’re about to commit into the outcomes your thesis describes. It asks a question that reference checks, credential reviews, and leadership assessments fundamentally cannot answer: does this system let good people succeed?
Reference checks evaluate individuals — people DD evaluates the system they operate in
Reference checks confirm credentials. They tell you the CTO built a similar product at a previous company, the VP of Sales closed $8M ARR at their last role, the COO ran operations for a company that scaled from 30 to 150 people. What they don’t tell you is whether this specific organisational design lets any of those people do what they’re good at.
A CTO who built a product at a company with clean technical authority will look indecisive in a company where the founder overrides every technical call. A VP of Sales who closed $8M ARR with pricing authority and product input will leave within eighteen months in a company where they can’t approve discounts and the product roadmap is invisible to them. A COO who scaled operations at a company with an established decision architecture will become a nominal-authority placeholder in a company where the founder still routes every cross-functional decision through themselves.
The reference check confirms these are capable people. The structural assessment asks whether the system they’re entering is designed to let them be capable. That’s people DD.
Four structural markers that predict organisational execution capacity
The people DD framework evaluates the same four markers used in organisational due diligence, applied specifically to the question of whether the team can deliver:
Decision routing. How does a significant cross-functional decision get made? Ask the founder, then ask two senior leaders independently. If you get three different accounts, the decision graph is improvised. In climate tech, where decisions cross hardware, software, government, and commercial domains, an improvised decision graph means every cross-functional decision routes through whoever pushes hardest or whoever the founder trusts most — which is not a people assessment, it’s a structural design failure.
Authority-title alignment. Do the senior team’s titles match their actual authority? If the VP of Engineering has a title and a team but the founder makes every architecture decision, the VP of Engineering is decorating the org chart. Capella Space’s October 2023 CEO replacement was the endpoint of this pattern: the informal authority structure finally became untenable at the cadence the company needed.
Information architecture. Does the senior team have access to the strategic context they need to make good decisions? Or does the founder hold context that others can’t access — board discussions, fundraising status, key customer conversations — making every senior leader’s decisions structurally uninformed?
Scaling readiness. If the company needs to go from 30 to 80 people, does the organisational infrastructure for that transition exist? Or is the plan “hire great people” — which is not a plan, it’s a hope that the structure will emerge, and it’s a plan to hit scaling breakpoints at exactly the moment the thesis needs the company not to.
Climate tech requires this assessment more than software because the operating model is harder
Software companies run one operating model. The people DD is simpler because the coordination load is lower. Climate tech companies run four operating models simultaneously — hardware, software, government, commercial — each with different decision cadences, different authority structures, and different definitions of “shipped.” The people DD for a climate tech company has to evaluate whether the decision graph can handle four cadences simultaneously, not just whether individual leaders are competent within their respective functions.
At ICEYE, every person on the senior team was individually excellent. The structural assessment question — does this system let excellent people produce excellent outcomes? — would have revealed that cross-functional decisions had no clean authority structure, that the four operating models were coordinated through the founder’s bandwidth, and that adding senior people didn’t increase decision throughput because the bottleneck was architectural, not headcount. That’s a people DD finding. No reference check would have surfaced it.
When to run people DD and what the output looks like
Run people DD before the investment, in parallel with financial and technical DD. Two weeks. The output isn’t a team scorecard — it’s a structural risk profile with named mechanisms and conditional interventions:
“The decision graph routes every cross-functional decision through the founder. If the thesis requires the company to scale from 30 to 80 people, this decision architecture will cap throughput at the founder’s bandwidth. Condition: redistribute decision authority across the four operating models before the Series B capital hits the account, or the hiring plan will add coordination cost without adding decision capacity.”
That’s a people DD finding. It’s specific, it’s structural, it identifies the mechanism, and it prescribes a condition for the investment — not “hire better people” but “redesign the system before adding people to it.”
For family offices entering climate tech with concentrated positions, people DD is the layer where the most portfolio value is at risk — because every structural failure in a five-company portfolio lands on a bigger share of the fund. The assessment takes two weeks and changes the investment conversation from “is this a good team?” to “does this system let a good team deliver?”
“People issues” in portfolio post-mortems are almost never people issues. They’re decision-graph failures wearing a people mask. Run the structural people DD before the next check.