Series A due diligence checklist for Indian startups
Series A due diligence checklist for Indian startups
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A Series A due diligence checklist covers five areas: legal and corporate records, financials, tax and statutory compliance, people and contracts, and product, IP and customers. A lead investor's lawyers will ask for documents in all five, going back to the day you incorporated, so the founders who close fastest are the ones who build this room before the term sheet arrives.
Who this is for: Indian founders preparing for, or already in, a Series A round, usually with a seed round and some foreign investors behind them.
How Series A diligence differs from seed
At seed, diligence is light. Investors look at the founders, the deck, early numbers and the cap table. Our seed round data room checklist covers that.
At Series A, things change in three ways:
- Lawyers and accountants do the reading. The lead investor appoints a law firm, and sometimes a financial diligence team. They work through a long request list, item by item.
- History matters. They check every past round, every filing and every share issue since incorporation.
- Findings change terms. Gaps become conditions in the final agreements: things you must fix before the money arrives, or after it, with deadlines.
The good news: most of what they ask for already exists somewhere. The work is finding it, fixing gaps and organising it.
Legal and corporate records
This is where most delays start. Lawyers want to see a company that has been run properly from day one.
Checklist
- Certificate of incorporation, and any name change certificates
- MOA and AOA, with every amendment
- Minutes of all board and shareholder meetings
- Statutory registers: members, directors, charges, share transfers
- Every past round's documents: term sheet, share subscription agreement, shareholders' agreement, board and shareholder approvals
- Share allotment filings with the Registrar of Companies for every issue
- Annual ROC filings for every year: financial statements (AOC-4), annual return (MGT-7) and auditor appointment (ADT-1)
- FEMA filings for foreign investment: FC-GPR for each allotment to a non-resident, FC-TRS for transfers, and the annual FLA return
- Any loans, charges or guarantees, with their documents
- Any legal notices, disputes or litigation, past or current
Watch for: FC-GPR is due within 30 days of allotting shares to a non-resident, and needs a valuation certificate from a CA or SEBI-registered merchant banker. A missed FC-GPR is one of the most common findings in Indian diligence, and fixing it involves the RBI, which takes time.
Financials
The financial team wants to know that your numbers are real, consistent and repeatable.
| Document | What they check |
|---|---|
| Audited financial statements, last two or three years | That the books were audited and the auditor raised no serious qualifications |
| Monthly management accounts (MIS), last 12 to 24 months | Trends, and whether MIS agrees with the audited numbers |
| Bank statements, every account | That revenue and major costs actually moved through the bank |
| Revenue by customer, by month | Concentration, churn and how repeatable revenue is |
| Budget for this year, and actuals against it | Whether you hit your own plan |
| Financial model for the next three years | Assumptions behind the plan for the money |
| Debtors and creditors ageing | Unpaid invoices, and bills you owe |
| Unit economics workings | How you calculate CAC, payback, margins |
Watch for: the deck, the MIS and the audited accounts should agree, or there should be a short note explaining the difference. Revenue recognition is a frequent question: when you book a sale versus when the money arrives. If you sell annual plans, expect to show how much of the year's payment you count each month, and how much sits as deferred revenue on the balance sheet. A short note on your accounting policies, agreed with your auditor, answers most of these questions before they're asked.
Tax and statutory compliance
Investors don't want to inherit tax problems. Expect questions on every type of tax and statutory payment.
Checklist
- Income tax returns for every year, with any notices and replies
- Advance tax payments
- TDS: deductions on salaries, contractors, professionals and rent, with quarterly returns and the certificates issued
- GST: registrations, monthly returns, input tax credit reconciliation, e-invoicing if your turnover requires it
- Transfer pricing documentation, if you have related-party transactions with group companies abroad
- Professional tax registration and payments for each state with employees
- Startup India (DPIIT) recognition certificate, if you have one
A note on the new Income-tax Act. From 1 April 2026, the Income-tax Act, 2025 replaced the 1961 Act. The TDS provisions have been brought together in a new section, and the familiar section numbers changed. Diligence for older years will still refer to the old sections. Make sure your CA's records are clear about which law applies to which year.
A note on angel tax. The angel tax under section 56(2)(viib) of the old Act was abolished from FY 2025-26. Lawyers may still ask about share issues in earlier years.
People and contracts
The question here is simple: does the company have the right agreements with everyone who works for it, and has it met its obligations to them?
Checklist
- Employee list with roles, joining dates and locations (salaries are usually shared under confidentiality)
- Signed offer letters or employment contracts for everyone
- Confidentiality and IP assignment clauses for every employee
- Contracts with consultants and freelancers, with IP assignment
- PF and ESI registrations and monthly payment records, where they apply
- Payroll registers reconciled with bank payments
- ESOP plan, board and shareholder approvals, grant letters, and the grant register
- Founder agreements, including vesting
- HR policies: leave, code of conduct, and a POSH policy with an internal committee if you have 10 or more employees
Watch for: the ESOP grant register should match the cap table exactly. Our post on ESOPs in India explains how pools and grants should be recorded.
Product, IP and customers
This part confirms that the company owns what it sells and that customers really pay for it.
Checklist
- Trademark applications and registrations
- Patents, if any
- IP assignment from founders for anything built before incorporation
- List of open-source software used, and the licences
- Domain names, owned by the company and not a founder personally
- Material customer contracts: top customers by revenue, with term, value and renewal
- Material vendor contracts, especially anything you can't easily replace
- Privacy policy, terms of service, and how you handle personal data
- Information security practices, if you sell to larger companies
Watch for: the first version of the product built by a freelancer or an agency before you had contracts in place. If there's no IP assignment, get one signed now.
What comes in which wave
Requests rarely arrive as one neat list. They usually come in waves, and knowing the order helps you prepare.
| Wave | What they ask for | What to have ready |
|---|---|---|
| Before the term sheet | Deck, metrics, cap table, high-level financials, a few customer references | Your seed room, updated to this month |
| First week after signing | The full legal and financial request list, often 60 to 100 items | The five folders above, with gaps already noted |
| Weeks two and three | Follow-up questions on what they've read: specific filings, contracts, unusual transactions | A request tracker and quick written answers |
| Before closing | Fixes for anything they found, signed confirmations, final cap table | Proof of each fix, such as a late filing now made |
| After closing | Conditions to complete within a set time, plus the FEMA and ROC filings for the new round | Dates in the calendar, with an owner for each |
Customer reference calls usually happen early. Pick three customers who know you're raising and are happy to speak, and warn them before the investor calls.
How to run diligence without it running you
A few habits make the process much faster.
- Build the room before the term sheet. Use the five folders above. Number every document.
- Name one person on your side. Usually a founder plus your CS or CA. Every request goes through them.
- Track every request. Keep a sheet with the request, owner, date asked and status. Lawyers send lists in waves.
- Fix, don't hide. If a filing was late, say so, show the fix, and move on. Lawyers find everything eventually, and honesty buys goodwill.
- Answer questions in writing. Keep all questions and answers in one place, so nobody asks twice.
How long it takes depends mostly on how ready you are. Several weeks is common. Missing documents and late filings are what drag it out.
Common mistakes
- Starting the room after the term sheet. You spend the most stressful weeks of the round digging through email.
- A cap table that doesn't match the register of members. Every share issue must line up with its filings.
- Missing FC-GPR filings for earlier foreign investment.
- No IP assignment from an early contractor or a founder who has left.
- MIS that disagrees with the audited accounts without explanation.
- Answering the same question three times because answers were scattered across email threads.
Free download
Full Series A diligence checklist
Owner, status and notes for every item.
Excel sheet, 17 KB
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Questions people ask
What is checked in Series A due diligence?
Lead investors and their lawyers check five areas: legal and corporate records, financials and audited accounts, tax and statutory compliance, people and contracts, and product, IP and customers. They want to confirm that what you've said is true, that the company owns what it sells, and that no hidden liability will surface after the money lands.
How is Series A diligence different from seed?
Seed diligence is light and mostly about the founders, the deck and early numbers. Series A is done by lawyers and often accountants, item by item, over several weeks. Expect questions about every filing, every past round, every employee contract and every material customer agreement, going back to incorporation.
How long does Series A due diligence take?
Usually several weeks, and longer when documents are missing or filings are late. The biggest delays come from things founders could have fixed earlier: missing IP assignments, late ROC or FEMA filings, unsigned agreements and numbers that don't reconcile. A complete, organised data room shortens it noticeably.
What are the most common Series A diligence red flags in India?
Late or missing filings with the Registrar of Companies, missing FC-GPR filings for foreign investment, gaps in TDS or GST compliance, employees without PF registration, missing IP assignments from founders or contractors, and a cap table that doesn't match the statutory register. Most are fixable, but they take time.
Sources
- India Briefing: Series A funding compliance guide for Indian startups (Aug 2025) (opens in a new tab)
- Treelife: FC-GPR filing after foreign investment (opens in a new tab)
- India Briefing: Section 393 of the Income-tax Act, 2025 (TDS) (opens in a new tab)
- ClearTax: Angel tax abolished from FY 2025-26 (opens in a new tab)
This is general information, not legal or tax advice. Check with your CA or lawyer for your company's situation.