Due diligence does not create problems — it finds the ones already there. Founders who clean house before the term sheet negotiate from strength; the rest bleed valuation through “conditions precedent.”
The four files investors will open
- Corporate: incorporation papers, every allotment documented, registers current, cap table reconciling to the member register exactly
- Financial: statements consistent with ITRs and GST filings; revenue recognition defensible; no unexplained related-party flows
- Compliance: ROC, tax and labour calendars demonstrably followed — certificates and challans retrievable in minutes
- Contracts & IP: customer agreements signed, IP assigned to the company (not resting with founders or freelancers), employment docs complete
The classic deal-wounders
Verbal equity promises surfacing mid-diligence; ESOPs granted without a scheme; unstamped share certificates; founder loans with no paper; GST/ITR turnover mismatches.
The timeline
Real cleanup takes weeks, not days. Start when you start the pitch deck, not when the data-room link is requested.
We run pre-diligence audits for startups — startup advisory · get investor-ready.
