Series A due diligence checklist: every document a lead fund asks for

A Series A due diligence checklist is the list of company records that a lead venture fund and its lawyers review between the signed term sheet and the closing of the round. It covers corporate formation, the capitalization table, financial statements and metrics, intellectual property, material contracts, employees, legal compliance and data security. The fund uses it to confirm that nothing in the files contradicts the pitch or creates a liability the new money would inherit.

At seed, a lead often relies on a short call with your lawyer and a look at the cap table. A Series A lead is usually writing a larger check, taking a board seat and signing documents based on the NVCA model forms, so its counsel works through the full file. The good news: the request list is predictable. Below is the version we would hand a founder today.

What happens in Series A due diligence, step by step?

Series A diligence runs in two layers. Before the term sheet, partners test the business: market, product, team, retention and unit economics. After the term sheet, lawyers and analysts verify. The second layer is where a data room does the work, because the request list is long and several firms read it at once.

The no-shop period in the term sheet matters here. While it runs you cannot talk to other funds, so every week spent hunting for a missing consent is a week of bargaining power gone. That is the practical reason to prepare the room early.

Which folders does a Series A data room need?

Funds do not insist on a single structure, but they read faster when the index mirrors their own request list. Number the folders, keep the numbering stable for the whole round and put a one-line note on each. The window below is the layout we would start from for a software company.

How much goes into each folder? The bars count the items in our checklist that a fund usually requests by the end of a Series A, per folder. They come straight from the checklist data, so they change if the checklist does.

Corporate records: is the company what it says it is?

Counsel starts with the entity. For most US venture-backed startups that is a Delaware corporation, and the first files opened are the certificate of incorporation with every amendment, the bylaws and the board’s written consents since formation.

What they check:

• The share classes and the number of authorized shares in the charter match what has actually been issued.
• Every issuance of stock and every option grant has a board approval behind it, with the date.
• Directors were properly appointed and any departed director was properly removed or resigned in writing.
• The company is in good standing in Delaware, with franchise tax and the annual report filed. An unpaid franchise tax bill is a common, easily fixed gap; the Delaware Division of Corporations explains the two ways the tax is calculated. The default bill uses the authorized shares method; for a startup with many authorized shares and few assets, the assumed par value capital method usually gives a much smaller figure.
• The company is qualified to do business in the states where it has employees or an office.

If approvals are missing, Delaware law offers ways to ratify defective corporate acts after the fact (sections 204 and 205 of the General Corporation Law). Ratification works, but it takes your lawyer’s time and sometimes a stockholder vote, which is why the gaps should be found before the fund finds them.

Cap table and financing: does every share have a paper behind it?

This folder draws more questions than any other. The lead’s counsel will rebuild your capitalization from the signed instruments and compare it with your spreadsheet. Any line without a document behind it becomes a question, and some questions hold up the closing.

Two notes on the table. First, the 83(b) election must reach the IRS within 30 days of the stock grant, and it cannot be filed late. The IRS now publishes Form 15620 for it, though a signed letter in the right format still works. Second, investors look closely at SAFEs because post-money SAFEs fix the holder’s stake at the cap, so several SAFEs stacked at different caps can take more of the company than founders expect. Put a pro forma cap table in the room that shows every conversion and the pool increase in one place.

Financials and metrics: can the numbers be traced?

A Series A fund rarely asks for audited statements. It does want monthly management accounts that tie to the bank and a metrics pack whose definitions are written down. If your revenue figure in the deck uses one definition of annual recurring revenue and your billing export uses another, expect a long thread.

Sales tax deserves a line of its own. Since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax once they pass an economic threshold, and some states tax software and digital services. A fund will ask if you have looked at it; it rarely expects the question to be solved by Series A.

Before the round, run your own figures through the net revenue retention calculator and the burn multiple calculator so the numbers in the room match the numbers in your deck.

Intellectual property: does the company own its product?

Funds invest in the company, not in the founders’ personal assets. If the code, designs or brand were created by someone who never assigned them to the company, the company may not own them. Counsel checks this with care because the fix needs the signature of the person who created the work, and that person may have left.

Founders who left a job at a larger tech company shortly before starting the company should expect a question about prior employer IP. Some state laws, such as California Labor Code section 2870, limit what an employer can claim when the work was done on the employee’s own time without company equipment, but a fund will still want to know when the code was written and on which laptop.

Commercial contracts: what has the company promised?

Contract review is about terms that change the value of the company or limit what it can do after the round. Upload your top customers by revenue, your key vendors and partners, and your standard templates. Counsel reads for a short list of clauses.

If a large contract has a problem, do not hide it. Flag it in the disclosure schedule and explain the context in the room. Funds tolerate known issues; surprises discovered by their lawyers cost more trust than the clause itself.

Team, legal and security: what else does the lead check?

The remaining folders are shorter but carry weight. People files show that staff are properly hired and paid; legal files show the company is not exposed to claims it has not told you about; security files show that customer data is handled with care.

• Team and HR. Org chart, offer letters, contractor agreements, the equity grant ledger cross-referenced to staff, Form I-9 practice, and how contractors are classified. Misclassifying workers as contractors creates tax and wage exposure.
• Legal and compliance. Pending or threatened litigation, regulatory licenses, the privacy policy and terms of service, and any notices from regulators. Health, financial and children’s data bring their own rules (HIPAA, GLBA, COPPA) and a fund will ask which apply.
• Security and privacy. Written security policies, the latest penetration test summary, the incident log and the status of any SOC 2 work. A Series A company is not expected to hold a SOC 2 report, but if enterprise customers already ask for one, say where you are. The AICPA describes what a SOC 2 examination covers.

Our use-case pages go deeper on each strand: legal due diligence, financial due diligence, technical due diligence and people due diligence.

Who should see which folders?

A Series A room often has three outside audiences: the lead fund’s deal team, the lead’s law firm, and other investors joining the round who want to read but do not run diligence. They do not need the same access. Salary data and customer contracts in particular deserve tighter settings than the deck and the charter.

Settings like these need a room that supports per-folder permissions, view-only files, watermarks and an activity log. A shared drive link usually cannot do all four. Of the 17 rooms we track, 13 list a Q&A module, which helps when two law firms send overlapping questions. The table below shows seven of them in our ranking order.

For the full ranking with scores by measure, see the best data rooms for startups; for room costs over a four-month round, the startup data room pricing guide has a calculator.

How long does Series A due diligence take?

There is no fixed number. A clean room with an engaged lawyer can get from term sheet to closing in three to five weeks; a room built after the term sheet, with missing consents and an unreconciled cap table, can take two or three months. The calculator below uses our own planning assumptions: a base number of weeks per round, more time for each share of documents not yet filed, and half a week per known open issue. Set the round to Series A.

The output is a planning figure, not a promise. Holidays, the fund’s partnership meeting calendar and how quickly your lawyer turns drafts matter as much as the room.

How to prepare the room before the term sheet

Read the Series A use case for a ranked list of rooms for this round, and the page on diligence after the term sheet for what changes once counsel takes over.

Mistakes that slow a Series A down

• Uploading the shoebox. Dumping every file from a shared drive into the room makes the fund’s lawyers do your indexing, and they bill for it.
• Stale versions. Two copies of the same customer contract with different dates prompt a question each time.
• Missing context. A one-paragraph note on an unusual clause or an old dispute saves a call.
• No owner for questions. Name one person on your side who assigns and answers questions, and track every answer.
• Opening everything to everyone. Co-investors who are not running diligence rarely need salary files or full customer contracts.
• Building the room after the term sheet. The no-shop clock is already running.