Investor Due Diligence Checklist

A diligence list arrives numbered, and the company answers it in its own vocabulary. That is where the momentum goes. Their analyst is working the list they sent, so every reply organised differently has to be re-mapped by hand, by them, and the items that fail to map get asked for twice. The second failure is quieter: a blank status cell has exactly one meaning to the person reading it, which is not done yet.

Stonemarket Data is an invented Delaware company at Series A, answering an 84 item list against the room it built from the startup data room checklist. Thirteen items would have been blank on a first pass. Nine did not exist and never had, because a 22-person company has no SOC 2 report and no transfer pricing file. One line of reason each closed all nine, and the investor's outstanding list dropped from thirteen items to four. That is an afternoon's work against the thing a diligence process costs most.

The other silent failure is the reissue. Their first list had 79 items and their second had 84: five added after the partner meeting, three renumbered. A company still answering version one gets eight items wrong. And the boundary between an item that never applied and one that should exist is not a matter of taste, because Delaware enumerates the books and records a stockholder may inspect, and board minutes are on that list.