Quick answer: Series A due diligence covers six core areas — financials, metrics, legal, intellectual property, team, and customers. Most investors send a checklist post-term sheet, but the best-prepared founders have everything assembled before they sign.
The term sheet arrives. You feel relief. Then the due diligence request lands in your inbox, and the next 4–8 weeks of your life are determined by how prepared you were before that moment.
Series A due diligence is more rigorous than a seed-stage review. Investors are writing larger cheques, taking board seats, and backing a company they expect to scale to a Series B and beyond. According to Kruze Consulting, the complexity of due diligence increases significantly at Series A—covering detailed GAAP financials, unit economics, product scalability, and formal legal review in a way that earlier rounds typically do not.
This checklist covers every category investors will request at Series A, what they're actually trying to verify in each area, and what the most common deal-killing issues are. Use it as your preparation guide, not just as a response framework once diligence begins.
When Due Diligence Happens
Due diligence at Series A now happens in two phases, not one. Pre-term sheet diligence has become lighter and faster in recent years as investors move quickly to issue term sheets, but post-term sheet diligence has become significantly more thorough.
Pre-term sheet: 2–3 customer calls, basic financial and model review, quick background checks, and competitive review. Investors are forming convictions, not verifying every detail.
Post-term sheet: Full financial review, formal customer reference calls, IP diligence, background checks on founders and key hires, legal document review, and cap table audit. This is where deals slow down or die.
The practical implication: having your data room fully assembled before you sign a term sheet saves 1–2 weeks of closing time. Y Combinator notes in their Series A diligence checklist that having everything ready before signing can cut a week off the closing process on its own.
The Six Areas of Series A Due Diligence
1. Financial Due Diligence
Financial diligence is the most extensive category at Series A. Investors are no longer taking your model at face value; they're verifying that your numbers are accurate, your accounting practices are sound, and your projections are defensible.
What investors will request:
- GAAP financial statements for the past 2–3 years (income statement, balance sheet, cash flow statement)
- Monthly management accounts for the past 12–18 months
- Bank statements to verify cash balances and revenue figures
- Financial model with 18–24 month projections, including assumptions
- Cap table showing all equity, SAFEs, convertible notes, options, and warrants (fully diluted)
- Burn rate and runway analysis
- Revenue recognition policy: how and when you book revenue
- Deferred revenue schedule, if applicable
What they're actually verifying: investors are looking for internal consistency on whether your revenue figures match your bank statements, whether your model assumptions are coherent, and whether your accounting reflects the business accurately. Common issues at this stage include premature revenue recognition, incomplete accrual accounting, and cap tables with unresolved SAFEs or ambiguous terms.
2. Metrics and Unit Economics
At Series A, metrics are not just supporting material; they are the primary evidence of whether your business is working. Investors will build their own version of your metrics from your underlying data, not just accept your summary dashboard.
What investors will request:
- Monthly ARR or MRR history with detailed cohort breakdown
- Customer acquisition cost (CAC) by channel (paid, organic, sales-led, product-led)
- Lifetime value (LTV) by cohort and customer segment
- Net Revenue Retention (NRR) and Gross Revenue Retention (GRR), monthly and annual
- Churn data broken down by logo churn and revenue churn
- Payback period by channel
- Sales cycle length and average contract value by customer segment
- Product usage data and engagement metrics
- Pipeline data from your CRM: deals by stage, conversion rates, velocity
What they're actually verifying: Investors are checking whether your growth is efficient, repeatable, and scalable. High CAC with strong NRR is fundable. High CAC with high churn is a deal-stopper. The cohort analysis is particularly important because investors want to see whether your older cohorts are expanding or contracting, not just whether your headline ARR number is growing.
3. Legal and Corporate Documents
Legal diligence at Series A is thorough. Missing documents or unresolved issues are the most common causes of closing delays.
What investors will request:
- Certificate of Incorporation and all amendments
- Bylaws (current version)
- Board meeting minutes and written consents
- Stockholder meeting minutes
- Fully diluted cap table with all equity, SAFEs, convertible notes, options, and warrants
- Stock option plan and all option grants with vesting schedules
- All prior financing documents: SAFE agreements, convertible notes, preferred stock purchase agreements
- Voting agreements, investor rights agreements, and rights of first refusal agreements from prior rounds
- Any side letters with existing investors
- All material contracts: customer agreements, vendor agreements, partnership agreements
- Employment agreements for founders and key executives
- Offer letters and contractor agreements
- Any non-compete or non-solicitation agreements
Common issues: Phoenix Strategy Group's legal documentation guide notes that the most frequent problems investors find include missing board consents for past equity grants, incomplete SAFE documentation, and employment agreements without IP assignment clauses. Each of these can take 2–4 weeks to resolve once flagged.
4. Intellectual Property
IP diligence is non-negotiable at Series A. Investors need confidence that the company owns what it claims to own, particularly the core product, codebase, and any proprietary data or processes.
What investors will request:
- IP assignment agreements from all founders, employees, and contractors who contributed to the product
- List of all patents, trademarks, and copyrights—filed, pending, and registered
- Domain name registrations
- Open-source software audit, which confirms no viral licences (GPL) are embedded in the core product
- Any IP developed by founders before incorporation and formally assigned to the company
- Documentation of any third-party IP licences used in the product
- Evidence that all contractors and external developers signed IP assignment agreements before starting work
The specific risk investors are checking: Whether any co-founder, early employee, or contractor who is no longer with the company could claim ownership of any part of the core IP. This is a frequent and serious diligence finding, particularly for companies where founding technical work was done before formal incorporation or IP assignment agreements were in place.
5. Customer and Commercial Diligence
Customer reference calls are a standard part of every serious Series A process. Investors are verifying that the customer relationships you described in your pitch are real, deep, and genuinely dependent on your product, not polite early adopters who could churn easily.
What investors will request:
- List of top 10–20 customers by ARR, including contract start date, current ARR, and renewal history
- Reference customers willing to speak with the investor — typically 4–8 calls
- Sample customer contracts (redacted for sensitive terms)
- Customer concentration analysis — what percentage of ARR comes from the top 3, top 5, top 10 customers
- Any customer churn events in the past 18 months, with explanation
- Pipeline data: weighted pipeline, conversion rates, average sales cycle
- Any multi-year or strategic contracts that demonstrate commitment
What they're looking for in reference calls: Investors ask customers three things — whether the product works as described, whether they would miss it if it disappeared, and whether they plan to expand usage. A customer who says, 'It's useful, but we could probably switch,' is a red flag. A customer who says, 'We've built our workflow around this,' is the outcome you want.
6. Team and Founders
Unlike in private equity, founders are a central focus of VC due diligence. In venture capital, the founder's background, credibility, and vision carry significantly more weight than in traditional investment diligence.
What investors will request:
- CVs and LinkedIn profiles for all founders and key hires
- Background checks on all founders, typically run by a third-party firm
- Reference calls with former managers, colleagues, and investors
- Equity and vesting schedules for all founders, which confirm that vesting is in place
- Org chart showing current team structure and key open roles
- Employee list with titles, compensation, and start dates
- Any co-founder departures or disputes — documentation and resolution
- Employee stock option plan details
What they're actually assessing: Whether the founders can build and lead the organisation required to reach Series B. Investors are looking for evidence of domain expertise, coachability, and the ability to attract and retain strong people. Any background check findings, unresolved co-founder disputes, or unexplained equity gaps will require explanation.
Series A Due Diligence Checklist: Summary Table
What Kills Deals in Due Diligence
Most due diligence issues don't kill deals outright; they delay them, reduce valuation, or add protective terms to the term sheet. But some findings do cause investors to walk away entirely. Based on patterns from experienced startup legal and accounting teams, the most common deal-ending issues are:
- Cap table disputes or unresolved equity claims from former co-founders or early employees who were never formally bought out
- Revenue figures that don't reconcile with bank statements, even small discrepancies, signal accounting problems investors can't underwrite
- Core IP not formally assigned to the company, particularly code written by a contractor or co-founder before incorporation
- Customer concentration above 30–40% in a single customer raises existential revenue risk
- Undisclosed litigation or threatened legal action discovered through background checks
- Employment agreements without IP assignment or invention assignment clauses
How to Prepare Before Diligence Starts
The best-prepared founders treat due diligence as an ongoing operational practice, not a one-time scramble. Capboard's Series A preparation guide recommends maintaining a clean, up-to-date data room as a standard operational practice starting from the seed stage so that when due diligence begins, the process is disclosure, not assembly.
Practical steps to take 3–6 months before your raise:
- Reconcile your cap table and confirm all SAFEs, convertible notes, and option grants are documented and accounted for
- Ensure all founders, employees, and contractors have signed IP assignment agreements, and track down any gaps
- Bring your financial statements up to GAAP standards. This typically requires an accountant if you haven't done it already
- Formalise your metrics tracking: NRR, CAC, LTV, and payback period should be tracked monthly and historically auditable
- Identify your reference customers early and brief them that you're planning a raise and that an investor may reach out
- Review all material contracts for any change of control provisions or assignment restrictions that could complicate the round
Founders who share their data room through a platform like Pitchwise can see exactly which investors are reviewing which documents and how much time they're spending, letting you follow up on the right materials at the right moment rather than waiting in the dark during a process that typically takes 4–8 weeks. It also allows them to to have control over who has access at which point in time.
FAQ: Series A Due Diligence
What is checked in due diligence at Series A?
Series A due diligence covers six main areas: financial statements and unit economics, legal and corporate documents, intellectual property ownership, customer references and commercial data, team background checks, and product and market analysis. Financial and legal diligence are the most document-intensive. Customer reference calls and founder background checks are typically the most time-sensitive.
What documents do VCs ask for at Series A?
The core document requests at Series A include: GAAP financial statements and monthly management accounts, a fully diluted cap table, all prior financing documents (SAFEs, convertible notes, preferred stock agreements), board and stockholder meeting minutes, material customer and vendor contracts, IP assignment agreements for all founders and employees, option plan documentation, and founder and key hire CVs. Having these organised in a data room before signing a term sheet is the most effective way to accelerate the closing process.
How long does Series A due diligence take?
Series A due diligence typically takes 4–8 weeks post-term sheet. The range depends on how well organised your data room is, how quickly you can schedule customer reference calls, and whether any issues surface that require additional documentation or explanation. Founders with clean, pre-assembled data rooms consistently close 1–2 weeks faster than those who assemble materials reactively.
What are red flags in VC due diligence?
The most common red flags in Series A due diligence are revenue figures that don't reconcile with bank statements, cap table disputes or unresolved equity claims, core IP not formally assigned to the company, customer concentration above 30–40% in a single account, undisclosed litigation or legal threats, and employment agreements without IP assignment clauses. Most of these issues delay rather than kill deals. Some, however, particularly revenue discrepancies and IP ownership gaps, can result in investors withdrawing their term sheet entirely.
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