Due diligence
The investor's formal verification of your business, financials, legal position, technology and team.
Why it matters
How quickly and cleanly you handle diligence is itself evidence of how you will operate as a portfolio company. Slow, inconsistent answers cost deals more often than bad numbers do.
A worked example
A typical Series A diligence covers financial records, customer references, key contracts, IP assignments, the cap table and employment agreements.
What is typical
Two to six weeks, longer at larger funds. Numbers that do not reconcile between your deck, your model and your data room are the most common source of delay.
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Related terms
Term sheet
A mostly non-binding document setting out the proposed valuation, structure and key economic and control terms of an investment.
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VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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