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VC Due Diligence Checklist

As the leading CPA 100% dedicated to VC-backed startups, we’ve helped over one thousand startups raise venture and seed funding – and see scores of VC due diligence checklists every month. 

In this article, our team of former venture capitalists explain what goes into the typical due diligence checklist by stage. Scroll down to see pre-seed/seed, Series A and Series B diligence checklists based on the most recent deals we’ve advised founders on. You can jump down to the downloadable pdfs by clicking the link.

Additionally, we’ll offer advice, tips and tricks to making this part of the fundraising process as successful – and pain free – as possible. So jump to the specific checklists by stage, or dive in with us as our experienced team walks through what to expect and breaks down the purpose of various investor questions.

Jump to the downloadable pdfs or interactive checklists

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Startup VC and M&A Due Diligence Checklist

Startup Due Diligence Overview

Locating an investor can be tough. Persuading them to invest in your startup presents an even greater challenge. VCs typically begin a formal due diligence process once they get truly excited about a startup, but they often start informal diligence – such as talking to market participants or common connections – right after meeting a founder that they like. 

The best founders always assume they are being analyzed by VCs, and have basic due diligence materials readily available. Of course, this requires not only knowing what materials to have on hand, but a process to keep these up-to-date and easy to share at a moment’s notice.

What is due diligence?

Due diligence involves a thorough assessment of a prospective investment to validate all pertinent information, identify the key risks of a possible investment, and evaluate them against the possible upside of the company. The formal part of this typically includes reviewing financial records, contracts, and various legal documents. But other parts like understanding the market and competitive landscape, understanding the value clients are getting out of the product(s), and figuring out if the technology is solid, are just as important.

A venture capitalist’s primary objective during diligence is to support any assertions made by the startup and gain deeper insights into various aspects of the business, including the team, technology, market potential, and competitive environment. The best investors have a standardized process that they follow for most (if not all) possible investments; these processes help them categorize possible risks and downsides against other investment opportunities.

Since most VCs are time-constrained, they don’t formally begin this work until they are seriously interested in the business. However, simple reference calls into their network can happen at any time, so founders should be prepared for common connections – or major clients they name drop – to be contacted at any point. 

Tip: If you know a VC is connected to your clients, it’s OK to ask the investor to not contact them about your startup until you give them permission. In fact, it’s not a bad idea to request that they hold off until you know they are serious about your company, since the best customer references are likely busy people who have limited time to talk about your startup.

What is a Venture Capital Due Diligence Checklist?

A venture capital due diligence checklist is a list of questions that an investor will share with a company that they are evaluating. The VC’s due diligence checklist contains a list of questions and materials that the VC will want to see in order to understand the company’s operations, financials, market, legal/tax compliance, etc.

The level of complexity in a due diligence checklist tends to increase the greater amount of funding that the company is raising or the later the “round” is (i.e. a Series D checklist is typically more exhaustive than a Series A checklist).

Why Do VCs Conduct Due Diligence?

Startup founders make certain claims about their businesses in their attempts to attract potential investors. In response, investors, like venture capital firms, undertake due diligence to authenticate these assertions and get a comprehensive understanding of the company prior to committing their capital. Due diligence lets VCs spot any warning signs or potential issues that could impact their investment decision, ranging from financial irregularities to legal problems. 

Often, VCs enlist experts to thoroughly assess the startup and obtain answers to questions like:

  • What are the potential problems or risks associated with this startup?
  • Can these problems or risks be mitigated?
  • What are the potential rewards of this investment?
  • Is this the right moment to invest in this startup?
  • Has the startup maintained honesty and transparency regarding its operations?
  • Does the startup adhere to all legal and regulatory requirements?
  • Does the startup own the intellectual property (IP) linked to its products and services?
  • What does the competitive landscape look like?

When Do VCs Perform Due Diligence?

Many founders don’t realize it, but due diligence starts informally the first moment an venture capital firm engages with a startup. During this initial interaction, the VCs pose questions to establish a broad understanding of the company. And, as we’ve already mentioned, investors may contact clients and common connections very early on in the process. Many investors conduct a lot of diligence prior to offering a term sheet. This can be good for the founder, as it means that there is only a small chance that the deal falls through. 

Tip: It’s a great idea to ask the investor how often they sign a term sheet and then don’t complete the investment. Most early stage investors complete close to 100% of the deals where they’ve signed a term sheet, as they’ve already conducted the market and founder diligence by that point, as well as talked to a few clients and figured out how the product and technology work. However, later-stage investors often don’t front-load the investigation of the company prior to the term sheet, so they are more likely to not consummate close to all of their signed term sheets with actual investments. Again, ask the investor before you sign a term sheet.

Formal accounting and legal due diligence usually kicks off once the founder and the VC investors agree on the term sheet, as this work is time-consuming, sometimes expensive, and, if the founder is running a tight ship, doesn’t usually cause an investment to not happen. Again, that’s assuming the founder is doing a good job running their finances and legal back office.

At this point, the VCs will provide the startup with a comprehensive venture capital due diligence request list, detailing a series of information requirements. The length of the due diligence process hinges on several factors, including the complexity of the company and its ecosystem, how efficiently the founder provides the necessary information, and the pace at which the VC investor reviews and analyzes the information.

How Long Does Venture Capital Due Diligence Take?

VC due diligence can take as little as a single meeting to months and months. The best companies that we work with tend to have ongoing conversations with potential venture capital investors well before they formally begin a fundraising process – and these companies typically can get through due diligence in two to four weeks. From a cold pitch, where there is no previously existing relationship, due diligence usually takes a bit longer, but hopefully less than six weeks.

How To Prepare For VC Due Diligence

  • Stay organized. Startups should organize their due diligence documents in secure folders that are categorized by the areas outlined on the checklist below. Since many of the typical due diligence items listed on the checklist are legal or accounting in nature, you should connect with your startup’s law firm and accounting firm to: 
    • make sure you have existing files like your articles of incorporation and tax returns stored in digital, sharable folders; 
    • establish process to regularly update your critical files like financial statements and 
    • get a point of contact who will assist you quickly should you need to begin diligence immediately. 
  • Be responsive. If you’re organized, it should be easy to respond to diligence requests in a timely manner. After all, you don’t want to miss out on a funding opportunity! Responsiveness also gives investors confidence in your startup. In addition, management should have a plan to respond to any issues that come up during due diligence. Appointing someone on the management team as a point person for diligence requests during the process is a good idea. 

Of course, we suggest working with an experienced startup-focused accounting firm, like Kruze Consulting, well before your startup is in the due diligence phase of an important transaction.

We’d be happy to help you out. Just set up a time to talk with us.

Avoiding Common Due Diligence Mistakes

Being prepared for VC due diligence is the best way to avoid common mistakes – and it’s the same for M&A transactions as well. The list of questions that VCs come with is quite standardized, so there is no excuse for being unprepared! Read through our checklist to see what materials you are most likely to need in your data room, and be ready to share them at the drop of a hat.

Ideally, you’ll make the generation of the operating due diligence metrics part of your regular course of business – knowing how much it is costing you to acquire customers, keeping your primary client contracts in a single location, dropping your tax returns into a folder every year – these are best practices that the top startup executives do regularly.

How to Ace Diligence & Avoid Common Mistakes

Recently, Kruze Consulting’s COO, Scott Orn, was invited to be a guest on Jason Calacanis’ highly-ranked This Week In Startups Podcast. In part-one of the series, they discuss how to ace due diligence and how to avoid common mistakes. It is a must-watch for startup founders looking to raise venture capital. Of course, we recommend having a VC due diligence checklist in your back pocket well before you fundraise so that you know what materials to organize prior to entering due diligence!

“After 200+ investments, the one thing you have to get right is due diligence,” said Jason Calcanis.

On this episode of the Startup Finance Basics series, Kruze’s COO Scott Orn and Jason Calcanis, angel investor, author, and podcast host discuss what VCs look for during due diligence.

Startups should practice presentations with a mock diligence session

Startup founders should make sure they’re putting their best foot forward when presenting due diligence information – and that means practice. It’s a good habit to have a mock diligence session where founders practice the presentation, review the materials, and walk through the financials and tax diligence. Remember, these meetings are high stakes, and you’re trying to make the best impression possible.

Understanding Due Diligence From the VC Perspective

When venture capitalists perform due diligence on startups, they are looking for potential market leaders in large markets – and VCs’ return expectations are huge. Most early-stage investors want any given investment to be able to return the entire value of the fund! That means that during diligence, the investors need to get comfortable that the company has massive potential. 

A good diligence process confirms tactical things, like the company is in good legal standing and the finances are how the founders described. But it also needs to reinforce that the market opportunity is huge, the product (or product vision, depending on the stage) is solid, the team is the best one to attack the problem, and that the competition is like the porridge in Goldilocks, just right.

Here are some of the big picture items VCs will want to dig into during their research into a startup:

Management Team

Venture capitalists focus on assessing the management team in charge of the startup. They look at:

  • Domain Expertise: The knowledge and expertise of the management team in the specific industry or sector they operate in.
  • Total Experience Level (and Relevance): The years of experience and the relevance of the experience to the startup’s industry.
  • Individual Value Contribution: The unique skills and contributions each member brings to the team.
  • Venture capitalists want a management team that has a long-term vision for the company, technical product specialty, business acumen, and management cohesion.

Tip: Remember, the VC is looking to confirm that you are the right team to create a huge company in your chosen industry. One of the qualities venture capitalists value highly is a team’s ability to learn and adapt quickly, especially in fast-moving and uncertain markets. During due diligence, emphasize instances where your team has rapidly assimilated new information, pivoted strategy, or made swift course corrections that led to better outcomes. This is something even young, inexperienced founders can showcase.

Product Analysis

VCs analyze three fundamental components of the product being offered:

  • Product-Market Fit (PMF): It’s important for startups to demonstrate PMF, defined as the validation of the product concept in the target market, as signified by consistent organic consumption and word-of-mouth promotion. PMF is often considered a qualitative trait recognized from customer engagement and feedback.
  • Product Differentiation: VCs are interested in products that have a competitive edge and high barriers to entry. This could be due to economies of scale, network effects, proprietary technology or patents, high switching costs, or strong branding. Products that lack differentiation can become commoditized and compete solely on price, which can lead to margin erosion.
  • Value Proposition: VCs want to know why the customer needs the product and the value it provides. If a product is essential for business continuity, it is considered “mission-critical.” High customer churn or short customer relationships may indicate that the product does not offer enough value.

Business Model Viability

VCs examine the unit economics of the business, which involves breaking down the revenue and cost structure into the smallest units possible. They look for repeatable and scalable business models with high operating leverage, where a large proportion of costs are fixed relative to variable costs. On the development side, software startups are particularly attractive to VCs because once the software is developed, it can be sold to millions of customers without significant additional development costs.

Sales and marketing is another area where venture capitalists look for scalability. By analyzing the company’s sales and marketing strategies, VCs can evaluate the startup’s market positioning, competitive advantage, and potential for growth. Sales and marketing diligence also helps VCs identify any gaps or weaknesses in the startup’s go-to-market approach that may affect its scalability and long-term success. Of course, a seed stage business is going to have a very different sales and marketing diligence process vs. a Series B startup. At the earliest stages, the investor wants to know that the founders have a plan that is realistic and professional, and that they can incorporate feedback from the market into their plans. At a Series B, they’ll look for metrics that prove that there is a scalable sales and marketing engine in place that can ingest more capital to keep the growth rate up.

Due Diligence By Funding Stage

In Silicon Valley, the amount of effort put into diligence dramatically increases depending on the stage of the investment. Pre-seed and seed stage companies don’t have reams of historical financial data and customer interactions to investigate, whereas Series B and beyond companies have customer data, product usage, operational histories, and complex financial records that require deep, thorough examination. Let’s dive into the major items that VCs will examine by stage.

Pre-Seed/Seed Stage Due Diligence

  • Focus: Founding team, market opportunity, core idea. 
  • Management Team: Skill sets, dedication, and ability to execute. 
  • Market Validation: Addressable market size. 
  • GTM: Coherent, high-level go-to-market ideas.
  • Product: MVP or prototype, initial customer validation. 
  • Legal: Ensuring the company is correctly incorporated, intellectual property (if any) is protected. 
  • Finances: Basic financial model, use of funds, and burn rate. 
  • Accounting and Tax Compliance: Verification that the company has separate bank accounts for business purposes and that there is no commingling of personal and business expenses. Initial assessment of the company’s commitment to maintaining proper financial records.
  • Checklist Complexity: Simple, often delivered via email text.

Series A Due Diligence

  • Focus: Product-market fit, initial traction, scalability. 
  • Management Team: Expanded team capabilities and fit; success recruiting top-tier talent.
  • Market Validation: Revenue, user engagement, proof of demand. 
  • GTM: One or more successful, scalable GTM channels executing at respectable CAC.
  • Product: Roadmap, technology stack. 
  • Legal: Intellectual property, compliance checks, existing contracts. 
  • Finances: Detailed GAAP financial statements, cash flow projections, unit economics. 
  • Accounting and Tax Compliance: More formalized accounting processes, adherence to tax obligations.
  • Checklist Complexity: More complex for product, sales & marketing diligence, modest accounting checklist complexity, typically delivered as a PDF attachment in an email.

Series B Due Diligence

  • Focus: Scaling, operational efficiency, profitability path. 
  • Management Team: C-suite and key management. 
  • Market Validation: Growth, customer retention, market share. 
  • GTM: Functioning GTM system and team that can scale at attractive CACs.
  • Product: Maturity, scalability. 
  • Legal: Expanded compliance checks, employee contracts, potential litigation risks. 
  • Finances: Historical performance, revenue diversification, capital allocation. 
  • Accounting and Tax Compliance: Mature accounting practices, multi-jurisdiction tax compliance if expanding geographically, prepared to be audited (may not be required, but should be able to do an audit if needed).
  • Checklist Complexity: Highly complex diligence around customer metrics, sales and marketing, expect detailed questions on margins and strategic accounting items, and a long list of accounting and tax files; typically delivered as a PDF attachment in an email.

Series C and Beyond Due Diligence

  • Focus: Market leadership, new market or product expansion, corporate governance. 
  • Management Team: Experience in scaling, potentially going public or being acquired. 
  • Market Validation: Market leadership, competitive positioning, health of underlying market. 
  • GTM: Best in market GTM team, strategy and systems with highly-scalable, cost-effective channels.
  • Product: Intellectual property portfolio, featureset competitive advantages. 
  • Legal and Regulatory: More stringent legal checks, compliance in multiple jurisdictions, preparations for IPO or acquisition. 
  • Finances: Comprehensive financial models, EBITDA, public market readiness (if relevant). 
  • Accounting and Tax Compliance: Complete audits, preparation for public scrutiny, international tax compliance, and planning.
  • Checklist Complexity: Highly complex diligence around customer metrics, sales and marketing; likely outsourced accounting and tax diligence to sophisticated accounting firm who will produce a minutely detailed report; checklist will be delivered by a variety of spreadsheets and PDFs.

The diligence process intensifies at each stage to match the increasing complexity and stakes of the investment. Early stages focus on potential and basic compliance, while later stages scrutinize performance, scalability, and adherence to more complex legal and regulatory standards.

Downloadable Due Diligence Checklists

Startups are complicated, and investors don’t want to miss important details when they’re considering funding your business. So they’ll go through a due diligence process to assess and evaluate your startup. We’ve compiled checklists of common items that venture capitalists and other investors might request during the diligence process, to help you start assembling the information. We’ve also included descriptions of each item and reasons why investors want to see it. The checklists are separated into company stages.

Remember: Every deal is different, and your investors may ask for other information that’s not on these checklists. If you’re going through diligence, make sure to consult your legal counsel and accounting team.

Interactive Due Diligence Checklist

This interactive due diligence checklist template lists out many of the items that VCs and professional investors will ask for - by stage. Simply click to expand each section, and then will see a list of items, and then to the right a table that indicates at which stages investors are likely to ask for any specific item.

NOTE: All parties to any financing agreement should consult with their legal counsel and accounting advisors for specific due diligence requirements related to their individual circumstances, investing goals, and business requirements.

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Founder’s professional and educational background (and location) Current Outline experience and past successes, if applicable. Address failures by explaining what you learned. Yes Yes Yes Yes Yes
Founding team’s relevant skills and industry experience Current Show the team's experience, past successes, and how they complement each other (for example, leader, engineer, salesperson, etc.). Yes Yes Yes Yes Yes
Assessment of the founder’s commitment, enthusiasm, and passion Current Tell the story behind your idea and what you hope to accomplish. Yes Yes Yes Yes Yes
Clear communication of the founder’s vision for the company Current Explain your thoughts about the ecosystem your startup occupies and your overall trajectory for the company. Yes Yes Yes Yes Yes
Exit strategy, including potential acquirers or IPO plans Current Honestly assess your startup's potential and limitations, and demonstrate your understanding of possible successful outcomes. No No No No Maybe
Founder criminal history or legal history All Disclose if a founder has had any legal or regulatory issues - it is best to disclose this even if it is not asked for by investors. Maybe Maybe Maybe Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Income statement Last 3 years by month and by year One of three key financial statements that shows the company's financial performance over a specific accounting period. Yes Yes Yes Yes Yes
Balance sheet Last 3 years by month and by year One of three key financial statements showing assets, liabilities, and capital of the startup at a specific date. Yes Yes Yes Yes Yes
Cash flow statement Last 3 years by month and by year One of three key financial statements that summarizes the amount of cash entering and exiting a startup. Yes Yes Yes Yes Yes
Bank statements Previous 6 months Bank statements should reconcile with financial statements. Maybe Maybe Yes Yes Yes
Financial projections Next 3 years by month and by year Explain the key KPIs and how they change as the company matures. Yes Yes Yes Yes Yes
Detailed capitalization table, including shares, options, SAFEs, and convertible notes Current The cap table helps investors model different investment scenarios. Yes Yes Yes Yes Yes
Option pool details Current Summary of vesting schedule, ungranted option details, projections on options to be granted in next 12 to 24 months Yes Yes Yes Yes Yes
History of funding rounds, including valuation and terms Since founding Shows how the startup's financial performance has grown by achieving targets. Yes Yes Yes Yes Yes
List of current investors and their ownership stakes Current Disclose current investors, their stakes and what type of security they hold. Yes Yes Yes Yes Yes
Bookings history and projections Last 3 years history and next 3 years of projections, by month and by year For companies with sales teams. Yes Yes Yes Yes Yes
Accounts receivable (AR) aging and projections Current period Include any AR greater than 90 days past due. No No Maybe Yes Yes
Revenue recognition policies Current period Policy should match up costs and revenue associated with long-term projects or contracts. No No Maybe Yes Yes
Deferred revenue details and projections Recent period, near-term projections Highlight the product or service associated with major deferred revenue positions; investors may ask for this by major customer as well. No No Yes Yes Yes
Schedule of bad debt and write offs Recent period, near-term projections Include any material projections. No No No Maybe Yes
Inventory Current period Value by raw materials and SKU. Include aging and any amounts deemed obsolete. No No Yes Yes Yes
Accounts payable (AP) Current period List of any employees or service providers that are unpaid, have not been paid in full to date, or are subject to any payment deferral arrangements. No No Maybe Yes Yes
Name of current accounting system Current Include the date the company started using the system. No Maybe Yes Yes Yes
Name of current payroll system Current Include the date the company started using the system, and payroll schedule (weekly, bi-monthly, monthly). No Maybe Maybe Yes Yes
Contracts and Invoices for top 10 clients Current period Only relevent an enterprise sales model. No Maybe Yes Yes Yes
Derail for any major churned clients Last 6 months Mainly for enterprise sales models, but some VCs may want to diligence churned customers. No Maybe Yes Yes Yes
Leases Current period Any agreements concerning the purchase, lease, or sublease of real property, and any personal property leases. No No Maybe Yes Yes
Material contracts Current Any agreements, understandings, instruments, contracts, or proposed transactions to which the company is a party or by which it is bound which involve obligations of, or payments to, the company in excess of $20,000. No Maybe Maybe Yes Yes
Gross margin analysis Current Measured by subtracting all costs associated with producing a product from the selling price; VCs will want to investigate any trends. No No Maybe Maybe Yes
Cash burn rate Current period, near-term projections The amount of cash a startup is spending each month. Yes Yes Yes Yes Yes
Customer acquisition cost (CAC) Current and previous year How much a startup spends to get new customers. Highlight expenses included and excluded. Consider monthly of quarterly cohorts to show trends. Maybe Maybe Yes Yes Yes
Customer lifetime value (LTV) Current and previous year The average customer's revenue generated over their entire relationship with the company. Explain the assumptions behind the calculation. No Maybe Yes Yes Yes
Customer churn rate Current and previous year The number of customers lost during a given time period. Explain any changes in churn rate. VCs wil likely ask for cohorts of data by date of customer acquisition. No Maybe Yes Yes Yes
Venture debt/lines of credit detail Current Explain any venture debt or lines of credit/loans currently in place; share contracts and payment schedules; disclose any covenant violations or negative correspondence from the lender No No Maybe Maybe Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Federal tax returns Last 3 years Shows the startup's tax exposure and any compliance issues. Maybe Maybe Yes Yes Yes
Local/state tax filings Last 3 years Ensures the startup is filing in every appropriate jurisdiction and any compliance issues. Maybe Maybe Yes Yes Yes
Correspondence with tax authorities Since inception Federal, state and local – any correspondence between the company and the IRS or any state or local tax bureau or any federal, state or local governmental authority. Maybe Maybe Yes Yes Yes
409A valuations Last 2 valuations Copies of Internal Revenue Code Section 409A valuation reports. No Maybe Yes Yes Yes
Research and development (R&D) tax credit reports Current period Shows the startup is optimizing R&D credits. No Maybe Maybe Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Organization chart Current Shows the corporate structure and who reports to whom. No No No Maybe Yes
Salary schedule for all employees Current List employee pay, include bonuses and other cash compensation, and if this is expected to change materially; this is a good place to disclose expected founder pay. Maybe Maybe Maybe Yes Yes
Consultants Current period List of consultants, roles, and costs. Maybe Maybe Maybe Yes Yes
Projected hiring plans Next 3 years Projected hires by month, with title and projected compensation. Yes Yes Yes Yes Yes
Transactions with officers Current period Any existing or proposed agreements, understandings, or transactions between the company and any of its officers, directors, material stockholders, or any affiliate including, without limitation, non-competition agreements, employment agreements and non-form offer letters. Maybe Maybe Yes Yes Yes
Insurance Current period Any insurance policies (including documentation regarding workers’ compensation insurance) held by the company or of which the company is a beneficiary and a summary of such policies, if available. Maybe Yes Yes Yes Yes
Offer letters Current period Copy of the company’s standard offer letter. No No Maybe Maybe Yes
Special employee agreements Current period All employment agreements and other documents (such as offer letters) that contain change of control, severance provisions, bonus provisions, or acceleration of stock or option vesting. Maybe Yes Yes Yes Yes
Special agreements with founders, investors, etc. Current period Any agreements with founders, investors, etc. NaN NaN NaN NaN NaN
Employee benefits Current period Any employee benefit plans and arrangements, including, without limitation, stock option plans, bonus plans, pension plans, 401(k) plans insurance plans, and forms of agreements (including copies of all form of option and stock agreements that are in use). No No Maybe Maybe Yes
Employee accrued expenses Current period A list and breakdown of all outstanding accrued salary, paid time off, and reimbursable expenses. No No Maybe Maybe Yes
Foreign employees Current period A list (separated by country) of any foreign employees and their locations, with all benefits provided to foreign employees. No No Maybe Maybe Yes
Workers' compensation and unemployment claims history Since inception These claims represent a liability for the startup. No No Maybe Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Overview of current and planned products or services Current period, projections Detailed assessment of product/service as it stands and how it will be developed. Yes Yes Yes Yes Yes
Analysis of discontinued products and reasons Since inception Demonstrate what the startup learned from discontinued products. Maybe Maybe Yes Yes Yes
Key customer contracts, including terms and payment structures Since inception Shows product viability and market fit. Maybe Maybe Yes Yes Yes
Key customer churn risks Since inception Disclose any important customers who are renewing soon and the risk of churn. Maybe Maybe Yes Yes Yes
Market size and growth potential Since inception Demonstrate that the commercial strategy is sustainable. Yes Yes Yes Yes Yes
Identification of key competitors and their strengths and weaknesses Current Describe the competitive landscape and overall market. Yes Yes Yes Yes Yes
Analysis of the company’s unique value proposition and differentiators Current Explain why customers will choose your product over other options. Yes Yes Yes Yes Yes
Assessment of barriers to entry and competitive threats Current Outline factors that prevent newcomers from entering the market and limits competition. Yes Yes Yes Yes Yes
Marketing strategy and cost to execute Current Describe your strategic roadmap for executing and tracking marketing tactics and generating leads. Maybe Maybe Yes Yes Yes
Sales strategy and cost to execute Current Describe your sales goals and plans to achieve them. Maybe Maybe Yes Yes Yes
Sales cycle analysis Current Explain the repeatable and tactical process used to turn leads into customers. No No Maybe Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Overview of material vendor and supplier contracts Current period, projections Document all relationships with vendors, suppliers, and contractors. No Maybe Maybe Yes Yes
Critical vendor risks Current period, projections Explain any possible risks or concerns about important vendors. NaN NaN NaN NaN NaN
Insurance coverage, including liability, workers’ compensation, and directors & officers (D&O) insurance Current period, projections Explain and document the startup's general risk management strategy. Maybe Yes Yes Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
List of patents, trademarks, copyrights, and other intellectual property (IP) Current IP is a major basis for a startup's valuation. Maybe Yes Yes Yes Yes
Licensing agreements or IP-related partnerships NaN Validate the startup's IP claims. Maybe Yes Yes Yes Yes
IP protection strategy, including non-disclosure agreements (NDAs) NaN Explain your comprehensive plan to safeguard IP, including copyrights, patents, and trademarks. Maybe Yes Yes Yes Yes
Any pending or potential IP litigation NaN VCs will evaluate how legally sound and solid the startup's IP is; dislcose any potential litigation even if not asked about it. Maybe Maybe Yes Yes Yes
Invention agreements signed by employees, founders, consultants, etc. Since inception Demonstrate that the startup has ownership of inventions and intellectual property. Maybe Maybe Yes Yes Yes
List of employees, consultants, founders who have not signed intellectual property (IP) agreements Since inception Demonstrate that startup IP Is appropriately protected. No Maybe Yes Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Real estate Current LIstings of all owned or leased property and locations, with copies of deeds, mortgages, leases, and title policies. No No Maybe Yes Yes
Equipment Last 3 years LIst of all major equipment purchases and sales, and a list of any leased equipment. No No Maybe Yes Yes
Schedule of fixed assets Current List of all fixed assets with identifications numbers, description, original cost, and depreciation. No No Maybe Yes Yes

Information Requested Period Requested Description Pre-Seed Seed Series A Series B Series C
Software used and any software licenses Current This review validates the startup's development, processes, and practices. No No Maybe Yes Yes
Data management and data security practices Current VCs need to understand the startup's cybersecurity risks or vulnerabilities. No No Maybe Yes Yes
Current technology stack system Current Explain your infrastructure and tech stack choices and describe how well your system performs. No Maybe Yes Yes Yes
Agreements with external IT companies Current Any external IT contracts are part of an analysis of the startup's systems. No No Maybe Yes Yes
Disaster recovery plan Current This review helps demonstrate the overall health of the startup's IT infrastructure and risk mitigation. No No Maybe Maybe Yes
Cybersecurity breaches, if any Since inception Describe any breaches and explain the risk remediation methods put into place as a result. (These should be disclosed even if the investor does not ask). No No Maybe Maybe Yes

Due Diligence Experts - This Page’s Authors

Healy Jones is Kruze’s strategic finance leader. He was a venture capitalists and has invested in over 50 startups, and also has held executive positions at multiple VC-backed companies.

Healy Jones blends his venture capital experience with operational knowledge to support startup financial strategies. With a background in investing in over 50 startups and holding executive roles in VC-backed companies, Healy has been featured in major publications like the New York Times, Wall Street Journal, and TechCrunch. His efforts at Kruze have been crucial in helping startups collectively secure over $1 billion in VC funding, showcasing his ability to effectively navigate financial challenges and support startup growth.

Scott Orn, CFA, is Kruze Consulting’s COO, and was a partner with an early-stage investment fund. He has led diligence on multiple startups, and now helps Kruze clients prepare for diligence.

Scott Orn leverages his extensive venture capital experience from Lighthouse Capital and Hambrecht & Quist. With a track record of over 100 investments ranging from seed to Series A and beyond in startups, including notable deals with Angie’s List and Impossible Foods, Scott brings invaluable insights into financing strategies for emerging companies. His strategic role in scaling Kruze Consulting across major U.S. startup hubs underscores his expertise in guiding startups through complex financial landscapes.

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CEO @ Avochato

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Everybody, go to Kruze Consulting. They do a great job. I personally can tell you, they've done a great job for our companies, including Calm.com. I'm sure they’ll do a great job for you.

Jason Calacanis

Jason Calacanis

Angel investor

About Us

A CPA Firm Specialized in Startup Accounting & Finance

A CPA Firm Specialized in Startup Accounting & Finance

Startups are our niche, and our passion. Our clients have raised over $15 billion in VC funding. We are one of only a few outsourced accounting firms that specialize in funded early-stage companies - we only offer financial and tax services to fast growing startups in the Pre-Seed, Seed, Series A, Series B and Series C stages.

The Right Accounting Partner for Your Startup’s Next Round

The Right Accounting Partner for Your Startup’s Next Round

We know how to de-risk your startup’s next venture capital round. Our team makes sure you are ready to fly through your next VC’s accounting, HR and tax due diligence. And when you use us as your bookkeeper, we set up and keep up-to-date a due diligence folder so you can get that next round of fundraising.

A Leader in Cloud Accounting Software

A Leader in Cloud Accounting Software

Our practice is built on best of breed cloud accounting software like QuickBooks, Netsuite, Gusto, Rippling, Taxbit, Avalara, Brex, Ramp and Deel. Technology makes us more efficient, saving our clients money and letting us offer higher value services like FP&A modeling, 409A valuation, and treasury advice. Startups deserve to work with CPAs using modern software.

Trusted by Top Venture Investors

Trusted by Top Venture Investors

Top angel investors and VCs refer Kruze because they trust us to give the right advice. Our clients are portfolio companies of top technology and Silicon Valley investors, including Y-Combinator, Kleiner, Sequoia, Khsola, Launch, Techstars and more. With us, your books and taxes are in order when it’s time to raise another round of venture financing.

What types of startups does Kruze Consulting usually work with?

What types of startups does Kruze Consulting usually work with?

Kruze Consulting works with funded Delaware C-Corps. Our clients have secured Pre-Seed to Series C or Series D funding. We look to partner with our clients, going beyond the typical outsourced accounting relationship and seeking to provide a higher level advisory role. We feel honored to be a part of making the world a better place, even if it’s one debit and credit at a time.

Accounting, Finance, Taxes, & Payroll all in one solution

Accounting, Finance, Taxes, & Payroll all in one solution

Startup CFO services, startup accounting and bookkeeping services, startup annual taxes, expense reports, payroll, state sales taxes: we've got you covered. Our software provides custom tailored dashboards that can be provided weekly or monthly, depending on your preference and plan. Founders are often so busy building their company that they don’t have time to take care of their finances. Traditionally, these companies have had to work with a basket of people to get their work done, including bookkeepers, accountants, AP clerks, CFOs, consultants, and tax accountants. At Kruze Consulting, our founders have one point person, saving time and money.

READY TO CONNECT FOR A FREE CONSULTATION?

We are the experts at helping seed/VC-backed Delaware C-Corps with their accounting and finances!

Talk to an experienced accountant, not a generic sales person

 Kruze Consulting
Alex Janeck
 Kruze Consulting
Edith Silva
 Kruze Consulting
Randy Hall
Viz AI

$250M+ VC Funding Raised


"I had a great experience working with Kruze Consulting when we raised Series A. They know what VCs need to see, and how to present a startup’s books and finances. If you are going to raise venture capital, you need experts like Kruze."
Chris Mansi

Chris Mansi

CEO

Startup Venture Capital Assistance

With former venture capitalists on staff, our team is here to help you navigate the fundraising process and manage your board of directors

 Kruze Consulting
Scott Orn
COO | Former VC
 Kruze Consulting
Healy Jones
VP FP&A | Former VC
Pequity

Scale Remote Operations & Team


"Kruze has supported us above and beyond basic accounting needs by ensuring we have everything we need to expand and support our team wherever they may be located"
Zack Fisch

Zack Fisch

Head of Operations & Legal

Clients who have worked with Kruze have collectively raised over $15 billion in VC funding.

We set startups up for fundrising success, and know how to work with the top VCs.

 Kruze Consulting
Vanessa Kruze, CPA
Founder & CEO
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Experienced team helping you

Our account management team is staffed by CPAs and accountants who have, on average, 11 years of experience.

 Kruze Consulting
Bill Hollowsky, CPA
VP of Accounting Services
 Kruze Consulting
Claudine Vantomme, CPA
Controller
 Kruze Consulting
Morgan Avery
SUT/R&D Sr. Tax Accountant
 Kruze Consulting
Beth Bassler
Controller, CPA
Protara Therapeutics

Grew from a 2-person startup to a NASDAQ listed public company.


"The Kruze team helped us grow from a 2-person startup to a NASDAQ listed public company in 2 years. We wouldn’t have gotten public without Kruze’s support. Anyone thinking of launching a startup should make Vanessa their first call!"
Jesse Shefferman

Jesse Shefferman

CEO

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Get in Touch

Please help us connect with you

How can we reach you?

Our first response is typically via email, so please check your inbox.

Help us have a productive first consultation by providing some additional information.

What year was your startup incorporated?

What is your stage of funding?

(pick up from the list)

Approximately how much funding have you raised?

(please enter a dollar value such as 5000000)

Help us understand what you are looking for:

(Optional, click the ones you need)

Anything additional that you’d like to share?

Optional - if you’d like to share anything else to help us prepare for our consultation, please let us know. We are also happy to sign an NDA, just let us know.

Important Tax Dates for Startups

  Talk to a leading startup CPA