Fundraising readiness: what investors check, and how to prepare

What investors check

During due diligence, investors and their lawyers verify that the company is what the pitch says it is. They look at structure, ownership, contracts, compliance and finances, and any gap becomes a negotiation point or a reason to walk away.

The legal and corporate records

• Certificate of Incorporation, memorandum and articles, and any amendments.
• Cap table that matches share certificates, registers and filings.
• Statutory registers and minutes of board and shareholder meetings. See statutory registers.
• Founders agreement and IP assignments from every founder and contributor.
• ESOP plan and grant records, if any.

Compliance and filings

• ROC annual filings and director KYC up to date.
• GST, TDS, PF, ESI and income tax returns filed on time.
• Required licences and registrations in place and current.

Commercial and people records

• Signed employment contracts with confidentiality and IP terms.
• Key customer and vendor agreements.
• Trademark and other IP filings.
• Privacy policy and terms for your product.

Financials

Reconciled books, clean financial statements and a simple model that ties to them. See virtual CFO services.

How to prepare

1. Do a self-audit against the lists above, and note every gap.
2. Fix gaps in order of risk, starting with ownership and IP.
3. Organise everything in one folder, ready to share as a data room.
4. Have the shareholders agreement and term sheet reviewed before you sign. See shareholders agreement.