Due Diligence Checklist

What to prepare before investors start digging through the company.

Also known as: due diligence checklist, diligence prep, DD checklist

A due diligence checklist enumerates everything to prepare before investors dig: corporate records, cap table reconciled, IP assignments complete, contracts filed, financials modeled and reconciled, metrics defined and trended, team references ready, compliance current. Work it steadily from incorporation and fundraising diligence becomes a non-event.

check quarterly:  cap table reconciles? IP assigned? contracts filed? metrics defined?
                  books closed? compliance current? data room fresh?
fix continuously: gaps found early cost hours; found in diligence cost rounds

The highest-value items are the ones founders postpone: IP assignments for early work, contractor paperwork, option grant documentation, metric definition consistency. Each takes an afternoon now or kills weeks under a term sheet later.

The classic mistakes:

Starting at the term sheet. Scrambling documents mid-diligence while momentum bleeds. The checklist runs continuously from incorporation — diligence is a state, not a phase.
Reference roulette. Offering only friendly names while investors back-channel freely. Assume every material claim gets independently checked; keep one consistent story everywhere.
Metrics that move. Definitions shifting between deck, room and updates unravels under inspection. Freeze definitions, reconcile to raw data, disclose changes loudly.
Legal skeletons. Unsigned grants, verbal agreements, missing minutes, lapsed filings — each discoverable, each trust-destroying in discovery. Fix or disclose before reviewers arrive.
Treating it as paperwork. The checklist’s real product is a well-run company: clean ownership, real numbers, filed obligations. Diligence-ready is simply operated-well, documented.

Ritualize it: quarterly diligence self-review against this list, monthly data-room refresh, immediate filing of every new document. See data room for where it all lives and diligence for how reviewers use it.