A Due Diligence Checklist for Raising Venture Capital

Prepare for due diligence by working through a checklist and populating a data room with your documents.  Download a sample due diligence checklist for raising venture capital.  We’ve developed it from checklists we’ve gotten from various investors.  You can learn more about what’s on this list from our blog post.

Tips For Successful Due Diligence

We’ve found these tips useful to ease the process of due diligence:

Prepare for Due Diligence Before You Actually Start the Process
Create your data room (many people use DropBox) and start to add data. Certain data such as legal agreements won’t change, so work on those first. Financial information may vary based upon when due diligence begins, save that for last except for historical financials, such as annual financial reports provided by external accountants.

Use the Investor’s Due Diligence List
Professional investors do lots of deals and are used to seeing things a certain way. Even if you have prepared your own data room, reorganize it to match their list.  Making it easier for them to review your info enhances their understanding and saves time looking for your data.

Assign a Unique Number to Each Item
Assinging a unique identifier to each request makes it easier to find and make updates.

Track Who is Working on an Item
Keep track of who is working on an item and the date it was last touched.  This will help you see what is in process, who to connect with for info, and how long the request has been sitting idle. It will communicate to the investor that you are on top of the project.

Put Your DropBox Links Into the Spreadsheet
Avoid emailing documents if possible… email is not a good document management system. Create shareable links and put them next to the  item on the list

Put All Relevant Contact Info on the List
Use the Contact Info tab so everyone knows how to reach anyone else

Keep the Process Moving!
Deals decay over time! Brisk, accurate due diligence keeps the process moving and greatly increases your chances of closing in a reasonable timeframe.

Other Activities During Fundraising Process

Due diligence is just one activity required to successfully close venture capital. There are other areas as well, from creating a pitch deck to closing the deal. Download this deal activities grid to see a quick summary of roles and activities throughout the fundraising process.