Startup due diligence checklist: what investors check in an Indian round

Where it fits in a round

After the term sheet, the investor's lawyers, and sometimes accountants, send a request list. The company shares documents in a data room and answers follow-up questions, and the advisers write a report. Each finding is then fixed before closing as a condition precedent, disclosed and accepted, or covered by indemnities in the transaction documents. Angel rounds usually involve a lighter review of the basics.

Corporate and legal records

Most private companies other than small companies must now issue and hold securities in dematerialised form, with a compliance deadline of 30 June 2025, so investors also check demat status.

• Certificate of incorporation, memorandum and articles of association, and every amendment.
• Board and shareholder minutes and resolutions, and the statutory registers.
• A cap table that reconciles with the register of members, share certificates or demat records, and every return of allotment (Form PAS-3) filed with the Registrar of Companies.
• For each past share issue: the valuation report, approvals, offer letter and filings.
• Annual filings with the Registrar: financial statements and the annual return.
• The ESOP plan, approved by shareholders by special resolution, with grant letters and vesting records.
• Founders' agreements and any earlier investment agreements.

Financial and tax

• Audited financial statements, recent management accounts and bank statements.
• GST registrations and returns, with reconciliations.
• TDS deducted and deposited on salaries, contractor payments and rent, and the related returns.
• Income tax returns, assessments and any notices, including old angel tax cases.
• Provident fund and ESI registrations and payments, where they apply.

IP, contracts and people

• Intellectual property assignments from founders, employees and contractors to the company, and trademarks and domains held in the company's name.
• Key customer, supplier and partner contracts, especially change-of-control, exclusivity and liability clauses.
• Employment contracts with confidentiality and invention assignment terms.
• An internal committee under the POSH Act if the company has 10 or more employees.
• How personal data is handled, given the Digital Personal Data Protection Act, 2023, whose rules were notified in November 2025 and are being phased in.

Regulatory and FEMA compliance

If the company has foreign investors, expect a close look at FC-GPR and FC-TRS filings, annual FLA returns and the fair value certificate behind each foreign issue. Investors also check beneficial ownership against the rules on investment from countries sharing a land border with India, any sector licences the business needs, and pending litigation or regulatory notices. Rules in these areas change, so check current requirements with the official source or an adviser rather than relying on an old checklist.

Typical timeline

There is no fixed timeline. As a rough guide from practitioners, diligence on a seed round often takes two to four weeks and on a Series A four to six weeks, with later rounds taking longer. Gaps found along the way, such as a missing filing that has to be regularised, add time.

How to prepare a data room

• Run your own review first and fix gaps: file missed forms, ratify approvals and get IP assignments signed.
• Use one folder per area (corporate, cap table and ESOPs, finance, tax, IP, contracts, people, FEMA, litigation) with an index in each.
• Name files clearly and keep only final, signed versions.
• Give named access rather than open links, and keep a log of questions and answers.
• Prepare a short disclosure list of known issues; investors trust problems you raise first.