Due diligence: what investors ask for, and the data room that answers it

Due diligence is the investor checking that what you said is true and that there is nothing you didn't say. At seed it is lighter than at Series A, but it is not nothing, and the raises that fall over at the last minute usually fall over here — not because of fraud but because a document was missing for three weeks and the investor's enthusiasm went cold. Assemble the data room before you list; it takes a week and it is the most reassuring thing an investor can see.

The data room, in the order investors ask

1. Corporate

Certificate of incorporation and current articles of association.
Cap table (fully diluted) and the register of members.
Shareholders' agreement if one exists; any option agreements; any convertible or loan notes.
Board minutes and written resolutions for the last two years.
Companies House filings up to date (check: confirmation statement, accounts, PSC register, director identity verification).

2. Financial

Last two years' filed accounts and the current year's management accounts.
Bank statements, six months.
Aged debtors and creditors.
The forecast model with assumptions.
VAT returns and any HMRC correspondence; confirmation there are no arrears.
SEIS/EIS advance assurance letter.

3. Commercial

Customer list with revenue by customer (anonymised if you must) and concentration.
Key customer contracts and standard terms.
Pipeline, with stage and value.
Supplier contracts that matter.
Pricing history.

4. People

Founder service agreements.
Employment contracts and a headcount list with salaries.
Consultant agreements — with IP assignment clauses.
Any disputes, grievances or settlements.

5. Intellectual property and technology

Evidence the company owns what it uses: IP assignments from founders and contractors, domain registrations in the company's name, trademark filings.
Open-source licences in the codebase, if software.
Data protection: ICO registration, privacy notice, a sentence on where personal data is held.

6. Legal and regulatory

Licences and permissions the business needs.
Insurance schedule.
Property leases.
Any litigation, actual or threatened.

Assembling it in a week

Day one: the corporate and financial documents — most exist. Day two: customer and supplier contracts, the pipeline export. Day three: people documents, and chase the contractor IP assignments you never got signed. Day four: IP, domains, ICO, insurance. Day five: read everything yourself as if you were the investor, and write the disclosure list — the things you would rather they heard from you.

The five findings that kill deals late

The company does not own its product. A contractor wrote the code and never assigned the IP. Fix before you list: a short deed of assignment, signed.
A director's loan that looks like it will be repaid from the raise. SEIS/EIS money cannot be used to repay it and investors will not fund it. Convert it to equity or leave it in.
Customer concentration nobody mentioned. One customer at 45% of revenue is a risk; hiding it is a character question.
HMRC arrears. PAYE or VAT behind. Investors' money going straight to HMRC is not what they signed up for.
A co-founder who has left and still holds shares. See cap tables.

Questions founders ask

"Do I put the data room on Find?"

Put the plan, deck, accounts and forecast on your listing for matched investors to see. Share the full data room with investors who have indicated, via a folder link you control. Find's documents are for the first look, not the last.

"What if there's something bad?"

Disclose it, early, with what you did about it. Investors forgive problems they were told about; they do not forgive problems they found.

"Do seed investors really read all this?"

A lead investor putting in £100k+ will read most of it, or have someone read it. Angels writing £10k often rely on the lead. Either way, the fact that it exists and is organised is itself the signal.

List my business All guides