Due diligence is the checking an investor does before committing money. They verify that what you told them is true: your company records, ownership, contracts, numbers, product and team.
Example
At pre-seed, diligence is often light: a call with a few customers, a look at your cap table, proof that the company owns its code and IP, and a check that founder shares are vesting. At seed it adds revenue data, key contracts and a closer look at the market.
Why it matters for early-stage founders
Deals fall apart in diligence when claims in the deck cannot be backed up. A clean data room shortens the time from term sheet to money in the bank and signals that you run the company carefully.
The common mistake
Waiting for the term sheet to get organized. Missing IP assignments, an outdated cap table or unclear customer numbers are slow to fix and make investors nervous at the worst moment.
Find your gaps before investors do
The Investor Readiness Score checks your pitch deck the way an investor would and shows what you need to prove.
Get my readiness score