Free Startup Due Diligence Review Checklist

Review the company's vision and mission statements.

Assess the business model to understand the startup’s strategy.

Understand the company's strategic goals and timelines.

Consider the sustainability and scalability of the startup's business model.

Evaluate the competitive landscape and the startup's position within it.

Assess the founding team and their level of commitment and passion.

Review the staffing structure and quality of the key personnel.

Evaluate the company's recruiting and retention strategies.

Check employee satisfaction and morale.

Ensure there are open lines of communication within the company.

Verify incorporation documents and ensure compliance with local laws and regulations.

Review shareholder agreements, articles of incorporation, and bylaws.

Confirm ownership structure and equity distribution among founders and investors.

Assess any pending litigation or legal issues.

Check for intellectual property (IP) protection (patents, trademarks, copyrights).

Review contracts with suppliers, vendors, and clients.

Evaluate any regulatory compliance requirements (e.g., GDPR, HIPAA).

Assess the startup's financial strength and sustainability.

Review and understand income statements, balance sheets, and cash flow statements.

Analyze any financial risks and plans to mitigate them.

Investigate the sources of the startup's funding and its use of funds.

Determine the burn rate and runway of the startup.

Examine financial statements (balance sheet, income statement, cash flow statement).

Analyze revenue streams, projections, and historical financial performance.

Review budgeting and forecasting models.

Assess burn rate and runway.

Scrutinize debt obligations, if any.

Verify tax compliance and any outstanding tax liabilities.

Evaluate financial controls and internal processes.

Evaluate the scalability of the business model.

Assess the efficiency of operations and identify any bottlenecks.

Review technology infrastructure, software, and development processes.

Confirm data security measures and protocols.

Assess the technology roadmap and future development plans.

Evaluate any dependencies on third-party providers or platforms.

Analyze target market demographics, size, and growth potential.

Review competitive landscape and market positioning.

Assess barriers to entry and potential market disruptors.

Validate product-market fit and customer validation.

Evaluate pricing strategy and revenue model.

Identify key customer segments and acquisition channels.

Gather and organize all relevant documentation for review.

Ensure confidentiality agreements are in place for sensitive information.

Maintain clear communication channels with founders and key stakeholders.

Document findings, questions, and areas of concern during the due diligence process.

Seek legal and financial advice as needed to address any complex issues.

Prepare a comprehensive due diligence report summarizing key findings and recommendations.

Verify that the startup is registered and operating legally.

Review any existing or potential legal issues.

Ensure the startup has complied with all industry regulations and standards.

Investigate the startup's intellectual property rights and patent registrations.

Check the startup's data protection and privacy policies.

Evaluate the quality of the product or service.

Review the product or service's competitive advantage.

Check customer reviews and satisfaction ratings.

Determine the startup's market share and growth potential.

Understand the startup's marketing and sales strategies.

Review customer testimonials and references.

Conduct site visits or virtual tours of facilities, if applicable.

Assess the company's reputation and brand perception.

Evaluate any social or environmental impact initiatives.

Consider potential synergies with existing portfolio companies or strategic partners.

Plan for post-investment integration and ongoing monitoring.