How to Prepare for Due Diligence: The Complete Checklist (2026)

“Can you send over your data room?” That question usually comes right after a strong call. Interest is high. Momentum is real. And then everything slows down because the materials aren’t ready.

Due diligence is where fundraising shifts from narrative to verification. Due diligence is the comprehensive investigation investors conduct before finalising an investment. They'll examine your financials, legal compliance, operations, and team to verify everything you've claimed and assess risks.

Investors typically spend 2-3 months scrutinising every aspect of your business, and 30% of deals fall apart during this phase. If you prepare well, diligence feels controlled and efficient. If you don’t, it exposes every gap at once.

This guide walks through what investors actually ask for during startup due diligence, and how to prepare so the process moves quickly instead of dragging for weeks.

The Due Diligence Checklist: 5 Core Categories

1. Financial Documents

Critical files (prepare these first):

• Financial statements (3 years): balance sheets, income statements, cash flow
• Cap table with complete ownership breakdown
• Bank statements (last 12 months)
• Tax returns (3 years)
• Revenue projections and underlying assumptions
• Burn rate calculation and runway

Pitchwise Pro Tip: Keep your pitch deck and data room documents synced. Investors will cross-reference your deck claims against your DD files. Inconsistencies raise red flags.

2. Legal & Compliance

Must-haves:

• Certificate of incorporation and bylaws
• All previous investment agreements (SAFEs, convertible notes, equity rounds)
• Stock option plan and grant documentation
• Board meeting minutes and written consents
• Material contracts (customers, suppliers, partners)
• IP assignments from all employees and contractors
• Any litigation history or pending legal issues

Common mistake: Missing IP assignments from early contractors can derail entire deals. Audit this now.

3. Business Operations

Key documents:

• Customer list with revenue breakdown (top 20 customers)
• Supplier and vendor agreements
• Product roadmap and technical architecture
• Key metrics dashboard (MRR, churn, CAC, LTV, etc.)
• Marketing and sales materials
• Employee handbook and HR policies

4. Team & Organisation

Prepare:

• Org chart with all roles
• Employee agreements for all team members
• Consultant and advisor contracts
• Compensation structure (salaries, equity, bonuses)
• Benefits and insurance policies
• Any employment disputes or HR issues

5. Intellectual Property & Technology

Essential items:

• Patent applications and grants
• Trademark registrations
• Copyright documentation
• Source code repository access (for technical DD)
• Third-party software licenses
• Open source usage documentation

How to Prepare: 4-Week Action Plan

Week 1: Audit and Inventory

Create a master spreadsheet listing every document in the checklist above. Mark what you have, what's missing, and what needs updating.

Pitchwise tip: Cross-reference your pitch deck. Every metric, claim, and milestone should have supporting documentation.

Week 2: Fill the Gaps

Focus on critical missing items, especially financial statements, IP assignments, and legal agreements. Engage your lawyer and accountant now.

Week 3: Organise Digital Files

Set up your data room with logical folder structure. Use consistent naming conventions. Test access permissions.

Mirror your pitch deck structure: If your deck has a "Traction" slide showing 300% YoY growth, your data room should have a "Financials" folder proving it.

Week 4: Review and Rehearse

Have a trusted advisor or mentor review your materials. Prepare answers for difficult questions (lawsuit history, customer concentration, team departures).

Red Flags That Kill Deals

Investors will walk away if they find:

• Missing or incomplete financial records
• IP not properly assigned to the company
• Undisclosed legal issues or litigation
• Revenue recognition problems
• Founder disputes or unclear equity splits
• Customer concentration (>25% from one customer)
• Compliance violations in your industry

Data Room Best Practices

Structure your folders like this:

• 01_Company_Overview
• 02_Financials
• 03_Legal_Corporate
• 04_Contracts
• 05_IP_Technology
• 06_HR_Team
• 07_Marketing_Sales
• 08_Operations

Access controls: Grant view-only access and track who's viewing what documents. This gives you insight into investor focus areas.

Common due diligence questions to prepare for:

1. Why did your CMO leave after 8 months? (Team changes)
2. What happens if you lose your top customer? (Revenue concentration)
3. How defensible is your technology? (Competitive moats)
4. What regulatory changes could impact your business? (Legal risks)
5. Why did revenue dip in Q3? (Financial anomalies)

Have clear, honest answers ready. Evasiveness destroys trust.

Timeline breakdown:

• Days 1-7: Initial document review, preliminary questions
• Days 8-30: Deep financial and legal analysis, management interviews
• Days 31-60: Customer references, technical assessment, market validation
• Days 61-90: Final negotiations, outstanding items resolution

Speed matters: Companies that respond to requests within 24 hours close 40% faster.

If issues are found: Not every issue kills a deal. Minor problems are negotiable, outdated contracts, minor IP gaps, small accounting irregularities. Deal-breakers include fraud, undisclosed lawsuits, fake customer claims, and major regulatory violations.

Strategy: Proactively disclose known issues before investors discover them. Frame problems with your proposed solutions.

Tools to Streamline Due Diligence

• Data rooms: Pitchwise, DocSend, Papermark, Visible
• Cap table management: Carta, Pulley, Capshare
• Financial modeling: Causal, Finmark, Google Sheets templates
• Legal automation: Clerky, Ironclad, DocuSign

The Pitchwise advantage: When your deck and data room are integrated, investors experience a professional, seamless flow from pitch to diligence. You get total control and analytics on every interaction.

Final Thought

Due diligence rarely kills deals in a single moment, it slows them quietly. It introduces friction, creates doubt, and leads to repeated clarification calls that chip away at momentum. The founders who move fastest through diligence are not always those with the strongest companies; they are the ones who prepared their infrastructure before they needed it.

If you are raising treat your due diligence checklist as a core part of your fundraising strategy, not an afterthought. Tools like Pitchwise exist for exactly this reason: to organise your materials into a structured data room, control access, and give you visibility into how investors engage with your documents. So when the inevitable question comes, “Can you send over your data room?”, the goal is simple: no scrambling, no hesitation — just a clean, controlled process.

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