Term sheets and priced rounds
VC Due Diligence Data Room Checklist for Seed and Series A Startups
The short answer
A venture data room is an organized, curated set of documents that lets investors verify who owns the company, whether it owns its IP, what it has promised to others and whether it has complied with the law. Build it in ten folders: corporate records, capitalization, prior financings, intellectual property, employees and contractors, material contracts, finance, tax, regulatory and privacy, and litigation. Include signed final versions only, name files consistently, and fix gaps such as missing 83(b) elections, IP assignments or board approvals for option grants before the investor's counsel finds them.
Key numbers
| Item | Benchmark | Source |
|---|---|---|
| Legal diligence request list at Series A | 300 to 700 items | Startup Law and Fundraising |
| Time to complete legal diligence and documents after a term sheet | Commonly 4 to 8 weeks | Practice |
| Most common findings | Missing IP assignments, 83(b) copies, board approvals for grants, messy cap tables | Venture Deals; Business Planning; founder forums (2026) |
| Form D deadline for each prior Reg D round | 15 days after first sale | SEC Regulation D |
| 409A report needed for each option grant date | Valid up to 12 months or until a material event | Treasury regulations |
Principles
- Curated, not an archive. Only signed, final documents. No drafts, no expired agreements (confirm terminations in writing).
- One folder per category, consistent file names. For example
2.3 Seed SAFE - Jane Investor - 2026-03-14 - signed.pdf. - An index listing every document, its date and its status.
- Permissions: view-only, watermarking and activity logs for sensitive folders.
- Disclose problems early. Investors forgive known, explained issues more easily than surprises.
The checklist
1. Corporate records
- Certificate of incorporation and all amendments; good standing certificate.
- Bylaws and amendments.
- Incorporator action; all board consents and minutes; all stockholder consents and minutes.
- Foreign qualifications in each state where the company does business.
- List of directors and officers; organizational chart of any subsidiaries.
2. Capitalization
- Fully diluted cap table reconciled to documents (see cap table best practices).
- Stock ledger and stock certificates or notices of issuance.
- Founder stock purchase agreements with vesting schedules.
- 83(b) elections and proof of filing for founders and early exercisers.
- Equity incentive plan, board and stockholder approvals, all option grant notices and agreements, exercise records.
- 409A valuation reports covering every grant date.
- Warrants, promised grants and any side agreements involving equity.
3. Prior financings
- SAFEs and convertible notes, with side letters (pro rata, MFN, information rights).
- Priced round documents (stock purchase agreement, investors' rights, voting, ROFR and co-sale).
- Board approvals for each financing.
- Investor questionnaires (accreditation, bad actor), Form D filings and state notice filings.
- Any Regulation S documentation for non-US investors.
4. Intellectual property
- Founder technology assignments and CIIAAs.
- CIIAAs for every employee; IP clauses for every contractor and advisor.
- Patents and applications, trademark registrations and applications, domain names.
- Inbound licenses (software, data, content) and outbound licenses.
- Open-source software inventory with licenses.
- Any university, prior employer or government funding claims.
5. Employees and contractors
- Employee list with title, start date, location, salary, equity, classification (exempt or non-exempt).
- Offer letters and any employment agreements; severance arrangements.
- Contractor and advisor agreements; analysis of contractor classification.
- Employee handbook and key policies; I-9 records (kept separately, not uploaded broadly).
- International team: local employment contracts or employer-of-record agreements.
6. Material contracts
- Customer contracts above a threshold, standard terms of service and order forms.
- Supplier, cloud, data and outsourcing agreements.
- Partnership, reseller and distribution agreements.
- Contracts with exclusivity, most-favored-customer, non-compete or change-of-control clauses (flag them in the index).
- Leases and loan agreements; any security interests (UCC filings).
7. Finance
- Historical financial statements (monthly management accounts at minimum); audited statements if any.
- Current budget and financial model.
- Bank statements for recent months; debt schedule.
- Revenue recognition policy and key metrics definitions.
8. Tax
- Federal and state income tax returns (Form 1120), including Form 5472 if foreign-owned.
- Delaware franchise tax filings and receipts.
- Payroll tax filings; sales tax analysis if selling taxable products or services.
- R&D credit studies if claimed; transfer pricing for foreign subsidiaries.
9. Regulatory and privacy
- Privacy policy, data processing agreements, records of security incidents.
- Licenses and permits required for the business.
- Export control or sanctions analysis if relevant; outbound investment and data security rules for certain sectors.
10. Litigation and disputes
- Pending or threatened claims, demand letters, regulatory inquiries.
- Settlement agreements.
- Founder or former employee disputes.
Worked example: a pre-raise audit
Before starting its Series A, Acme runs the checklist and finds four issues:
| Finding | Risk | Fix | Time |
|---|---|---|---|
| Two option grants approved by email, no board consent | Grants may be invalid; 409A questions | Board ratification under DGCL Section 204 plus confirmation of exercise price | 1 week |
| Contractor who built the payments module never signed an IP assignment | Gap in IP chain | Confirmatory assignment with a small payment | 1 to 3 weeks |
| Form D not filed for the SAFE round | Regulatory issue; investors ask why | Late Form D filing (accepted by the SEC); check state notices | Days |
| Cap table shows 1,000 more shares for a founder than the stock purchase agreement | Ownership dispute risk | Correct the ledger to match signed documents; board confirmation | Days |
Total: about one month of work, completed before the first investor meeting instead of during exclusivity.
Red flags that slow or kill deals
- Missing or unsigned IP assignments from founders or key contributors.
- Equity promised in percentages, or grants without board approval.
- Missed 83(b) elections.
- Sales to non-accredited investors or payments to unregistered finders.
- Non-standard SAFEs that modified the YC form.
- Undisclosed litigation or founder disputes.
- A disclosure schedule with "no exceptions" that turns out to be wrong.
Suggested folder structure and naming
01 Corporate
02 Capitalization
03 Financings
04 Intellectual Property
05 People
06 Material Contracts
07 Finance
08 Tax
09 Regulatory and Privacy
10 Litigation
Name each file with the folder number, a short description, the counterparty, the date and the status, for example 03.2 SAFE - Seed Fund LP - 2026-05-02 - signed.pdf. Keep an index spreadsheet with the same numbering so counsel can refer to items precisely.
Key takeaways
Investors use diligence to confirm three things: who owns the company, whether it owns its technology, and whether anything it signed or failed to do creates hidden liabilities. A curated, indexed data room built before fundraising answers those questions quickly, shortens the closing timeline and keeps negotiating leverage on your side.
Frequently asked questions
What should be in a startup data room?
Corporate records, capitalization documents, financing history, IP documents, employee and contractor agreements, material contracts, financials, tax filings, regulatory and privacy documents, and litigation information.
When should I set up a data room?
Before you start fundraising. Ideally, keep a minute book from incorporation so that the data room takes days, not weeks.
Do seed investors do due diligence?
Yes, usually lighter: cap table, charter, founder stock and IP assignments, prior SAFEs and basic compliance. Series A diligence is much deeper.
Should I include drafts or old versions?
No. Include only signed, current documents, and note any terminated agreements with evidence of termination.
Who should have access to the data room?
The lead investor and its counsel first, then other investors as needed, with view-only permissions and access logs. Limit access to employee personal data.
Can missing documents be fixed during diligence?
Many can (ratifications, confirmatory assignments, late filings), but fixing them during exclusivity costs time and leverage. A missed 83(b) election cannot be fixed.