Due diligence checklist for a UK startup raise (2026)

What due diligence is

Due diligence is the investor's check that your company is what you say it is. After a term sheet, the investor and their lawyer review your corporate records, finances, contracts, people, intellectual property and compliance. What they find shapes the warranties, indemnities and conditions in the final documents.

Sprintlaw makes the point that findings should shape negotiated protections such as warranties and indemnities, as well as the price. Clean answers shorten the process and cut the legal bill.

This is general information, not legal or tax advice.

Treat the request list as a conversation. Investors usually send a standard list, and not every item applies to a company of your size. Ask which items matter most to them, answer those first, and mark the others as not applicable with a one-line reason.

Set up a data room early

A data room is an organised online folder with your documents in it. Sprintlaw recommends one, along with a deal tracker spreadsheet, and suggests focusing on high-impact contracts rather than an exhaustive list.

I'd build it before the first investor asks. Use the same folder names as the sections below, keep file names plain, and put a short index at the top. Control access, and keep a log of what each investor has seen.

Corporate records and ownership

Investors check Companies House filings, your articles, your register of members, and your share capital. Sprintlaw warns that if title to the shares is unclear, disputes over ownership can follow. Expect to provide your cap table, share certificates, board minutes and any shareholders' agreement.

Check your People with Significant Control register. GOV.UK says anyone holding more than 25% of shares or voting rights is a PSC, and changes must be reported within 14 days. Check that your confirmation statement is up to date too. GOV.UK gives a fine of up to £5,000 for failing to file, and strike-off as a risk.

Fix gaps now. If a share issue was never filed, or a director's appointment was never recorded, ask your accountant or lawyer how to correct the record. Investors usually accept a problem that has been fixed, and they dislike one that has been hidden.

Financial and tax records

Prepare your filed accounts, management accounts, a current budget, a list of debts and any security over company assets. Be ready to show your tax filings are up to date.

If investors expect SEIS or EIS relief, they will ask about it. For SEIS, HMRC's limits are £250,000 total raised, gross assets of no more than £350,000, fewer than 25 full-time equivalent employees and a qualifying trade under three years old. For EIS, since 6 April 2026 most companies can raise up to £10 million in 12 months and £24 million in their lifetime, with fewer than 250 employees and within seven years of the first commercial sale. Keep your advance assurance letter in the data room.

Reconcile your numbers before you share them. Check that the figures in your management accounts match your bank statements, your filed accounts and your forecast. Small mismatches slow the process and make investors question the rest of the data.

Intellectual property

For most startups, IP is the main asset. Investors want proof that the company itself owns the source code, designs, brand, trademarks and domain names. Sprintlaw highlights IP assignments from freelancers and contractors as a frequent gap.

Check every person who has written code or made designs for you. If they were contractors or co-founders before incorporation, get a signed assignment now. It is far easier to get a signature today than during a live round.

Check open-source licences on any code you ship. Keep a simple list of the components you use and the licence for each. Investors and acquirers ask for it, and building it in advance takes an afternoon.

People: employment, contractors and options

Collect signed employment contracts, contractor agreements, and any promises of equity. Sprintlaw notes employment issues are a common area where small problems become expensive later, including wrongly classified workers and missing written agreements.

If you grant options, show the scheme documents. For EMI, GOV.UK says an employee can hold up to £250,000 of options over a three-year period, and the company must have assets of £120 million or less and fewer than 500 employees from 6 April 2026. Keep records of valuations and grant dates.

Contracts, data protection and disputes

List your main customer and supplier contracts with renewal dates, termination rights and any change of control clauses. Investors read these for risks that could affect value after they invest.

Prepare your privacy notice, records of how you handle personal data and any data processing agreements. Sprintlaw says investors check whether your privacy documentation reflects what you actually do. Disclose any claims, regulatory issues and your insurance cover up front. Surprises found late damage trust more than the problems themselves.

Give a short written summary at the top of each folder. Say what is in it, what is missing and what you are doing about it. Investors appreciate a founder who has already found the weak points, and it shows you run the company with care.

Know what the investor's lawyer will use

Investor lawyers often use the model documents from UK Private Capital, formerly the BVCA, as a reference. The early-stage set covers Model Articles, a Shareholders' Agreement, a Subscription Agreement and a Summary of Terms, and the current edition is dated February 2025. It is drafted for Series A and described as not appropriate for a seed round. I still find the structure useful for seeing what warranties and disclosures to expect.

Ask your lawyer to prepare a disclosure letter if warranties are being given. It lists the exceptions to your statements, and it protects you if something minor turns up later.

How I'd run the process

I'd do a self-audit one month before the raise. Walk through each section above as if you were the investor, list the gaps, and fix the ones that can be fixed. Keep a short note for any that cannot be, explaining the risk and what you are doing about it.

Match this effort to the investor. A small angel cheque rarely needs a full legal review. A fund will. We built InvestorUniverse to show who is likely to write what size of cheque at your stage, which helps you decide how much of this to prepare before the first call.

Give one person on your side responsibility for the data room. Questions come in thick and fast during diligence, and a single owner keeps answers consistent and quick, so the investor sees a company that is in control of its own records.