This template is sponsored by 

Venture Capital Due Diligence Checklist

Venture Capital Due Diligence Template Structure

Corporate Structure

  • Organizational chart incl. all relevant shareholdings, branches and places of business
  • Foundation documents of all relevant companies
  • Description of the activities of each Group Company and of each Business within the Group
  • Documentation of the chain of transfer of the shares / partnership interests to their current holders, incl. sale and purchase agreements as well as certificate of incorporation
  • List of all current shareholders including size of respective shareholding + capitalization table
  • Up-to-date excerpts from the commercial register with regard to all entities
  • Up-to-date partnership agreements and by-laws
  • Minutes of shareholders’ meetings / partners’ meetings and shareholder resolutions / partners’ resolutions of last 3 years, if any
  • Minutes of the meetings of any advisory board (or their committees) and of the shareholders’ committee of last 3 years, if any
  • Copies of all agreements regarding the shares / partnership interests (including but not limited to pledges, security interests, options, nominee ships, trust agreements, usufruct, sub-participations)
  • All contracts, agreements and covenants between the entities being acquired and related entities (including but not limited to inter-company agreements, control agreements, agreements for the transfer of profits, business management agreements and integration agreements)
  • List of all managing directors and members of advisory boards (or of their committees)
  • Company development since foundation incl. key milestones and historical development

Agreements of Material Importance

  • Overview of all marketing, service and distribution agreements by region (including key details)
  • Overview of agreements with major customers (general terms of business, framework agreements, etc.), if any (including key details)
  • Overview of all material suppliers and customers by product line and region (including key details and any discounts if applicable)
  • All joint venture and co-operation agreements/ descriptions, if any with other enterprises
  • Overview of confidentiality agreements, non-competition agreements and related contracts
  • List of loan agreements, guarantee agreements, contracts of surety ship and other agreements regarding liabilities of third parties (including key details)
  • Shareholders loans
  • Security agreements, pledges, mortgages and other agreements establishing the rights of third parties to assets of the entities
  • List of all leases, financial leases, distribution agreements and any other contracts involving continuous obligations (including a summary of their contents)
  • List of main contracts with suppliers including key terms
  • Main contracts with distributors, licensees, agents or other persons involved in distribution
  • Secrecy agreements
  • All major existing consultancy agreements
  • List of all main insurance contracts including descriptions of risks covered and any pending damaging events
  • Standard forms used by the entities (including but not limited to general term and conditions, bills, order forms or warranties)
  • List of all other material agreements, especially with change-of-control clauses or which can be terminated only with several months’ notice or which provide for severance payments
  • All agreements with shareholders / partners and related persons, especially employment contracts, advisory agreements, lease agreements and loan agreements
  • All material contracts outside of the ordinary course of business (to the extent that they are not included above)

Real Estate

  • Description of the real estate owned by entities/ lease status (including key details)
  • Lease agreements regarding all real estate rented or let by the entities
  • Recent certified excerpts from the Land Register
  • Certified copies of the official ground plan for all the real estate
  • Information on any environmental matters

Intellectual Property and IT

  • Description of relevant (business critical) Intellectual Property Rights
  • Overview, descriptions and specifications of own and developed products as well as leased/rented
  • Patents and applications therefore
  • Trademarks and applications therefore
  • Copyrights (to the extent they are ascertainable or registered)
  • Utility models and registered designs (including applications therefore)
  • List of all licenses granted or taken
  • Description of IT infrastructure (incl. billing, customer tracking, etc.)
  • IT Hardware and software license description (incl. standard, technical and accounting software)
  • Description of R&D capabilities and product / technology road-map for coming years
  • Copies of research and development agreements to which the Group is a party
  • Details of whether and how any licenses, agreements or arrangements may be affected by the acquisition (breach, termination, etc.)
  • Details of existing or threatened litigation or other dispute resolution proceedings with regard to the infringement or validity of owned or third party IP or IT systems within the last 3 years or any circumstances which might give rise to such litigation or proceedings
  • Quality management certifications (Certificates, quality handbooks, audit reports)
  • Details of any Groups or business policies on data protection and the recording, monitoring and use of the telephone system, e-mail system and internet access

Labor Issues

  • Current average number of employees and historic development, by business unit, age profile, pay, lengths of service profile, technical skills (as FTEs and by headcount)
  • List of all additional compensation granted or promised in return for success or performance
  • Overview of all employers pension commitments and individual pension agreements and the group of affected employees
  • Standard form employment contract, including supplementary agreements (on secrecy, employee inventions, prohibition on competition etc.)
  • Copies of all shop agreements, collective bargaining agreements and other agreements between the entities and trade unions or employees’ councils
  • Information on any severance agreements with employees and former employees which have not been fully completed
  • Description of pending or planned offer of employment
  • Listing of loans granted to employees
  • List of visa applicants and status of their request
  • Copy of any report and investigations on health and safety problems and professional illness
  • Description of overall management structure and CVs of management and other key staff members

Compliance Issues

  • List of all licenses and public permits on the basis of which the entities carry out their business in its present form
  • List and copies of all rulings with official orders and directions (including but not limited to orders with regard to environmental protection)
  • List of all public grants and subsidies and descriptions of conditions of such grants and the repayment obligations

Operational & Technical Data

  • Standard operating procedures & manuals and analysis methodologies
  • Details of channel and alliance partners and sales composition arising there from. Provide copies of all such channel and sales partner arrangements
  • Sales by region and distribution channels, including development over time (historical & outlook). Status of sales pipeline by region, etc.
  • Product documentation & application as well as product pipeline

Litigation

  • List of all pending or threatened judicial and out of court disputes (including proceedings which have ended within the last 3 years)
  • Assessment of the risk of losses through respective disputes in the amount and probability

Financial information

  • Audited annual accounts of the parent company (non-consolidated and consolidated accounts) and all major affiliates for last 3 years
  • List of current account balances for last 3 years
  • Elimination of all extraordinary items (e.g. restructuring costs, legal disputes, extraordinary amortization of intangible assets or goodwill)
  • List of all public support programs
  • Monthly internal reporting for the last 3 years (management accounts)
  • Current year trading (monthly)
  • Projections of planning for next 5-7 years
  • Business plan, incl. detailed comment on all underlying assumptions
  • Description of capital expenditure items including break down per year for last three years as well as for the business plan period
  • Copies of all current internal financial projections, forecasts, budgets and cash flow analyses of the company and each other entity
  • Copies of accounting manuals, authorization manual and internal control procedure manuals
  • Analysis of revenue & EBITDA mix by product lines, distribution channels & regions
  • Analysis of revenue & EBITDA mix by customer
  • Basis for cost allocations and review of cost tracking systems to measure actual versus budgets. Briefly comment on the internal control systems adopted
  • Description and explanation of any extraordinary or significant non-recurring revenues and expenses during the last three years
  • Summary of accounts receivable as on date, with information on recoverability of amounts, customer contracts and project related references, credit terms associated, adjustments required if any, unbilled receivables, billing cycle. Provide Accounts Receivables ageing schedule with an analysis of bad debt reserve
  • Information on billed & unbilled receivables with specific focus on uncollectible
  • Monthly business metrics for the last 8 quarters including composition of revenues by revenue from distribution channels, regions, product lines, etc.
  • Description of all assets not required for operations
  • If not included in the above, please provide: a) break-out of direct and indirect costs and b) detail of non-recurring events

Taxes

  • Copies of all tax declarations and tax assessment notices of the entities within the last 5 years (including but not limited to corporate income tax, trade tax, VAT, social security tax and property tax)
  • Report on last tax audit and note on current or announced future tax audits
  • List of all unpaid tax debts
  • Complete description of all disputed with tax authorities

Market Overview

  • Description of relevant market and respective position of the Company in this market (Overview, size, historical development, trends, regional differences, influencing factors / drivers, critical success factors etc.)
  • Analysis of competitive environment
  • Analysis of strategy for technology/ product development
  • Description of market structure and value creation depth
  • Distribution of all available market reports

Other Information

  • Strategic focus / description of business model / depth of value creation and comment on future business potential
  • Company brochures, presentation, etc.
  • Copies of all newspaper articles and press releases of the entities within the last year if available
private equity icon

Venture Capital Due Diligence Checklist

Venture Capital Due Diligence Template Structure

Corporate Structure

  • Organizational chart incl. all relevant shareholdings, branches and places of business
  • Foundation documents of all relevant companies
  • Description of the activities of each Group Company and of each Business within the Group
  • Documentation of the chain of transfer of the shares / partnership interests to their current holders, incl. sale and purchase agreements as well as certificate of incorporation
  • List of all current shareholders including size of respective shareholding + capitalization table
  • Up-to-date excerpts from the commercial register with regard to all entities
  • Up-to-date partnership agreements and by-laws
  • Minutes of shareholders’ meetings / partners’ meetings and shareholder resolutions / partners’ resolutions of last 3 years, if any
  • Minutes of the meetings of any advisory board (or their committees) and of the shareholders’ committee of last 3 years, if any
  • Copies of all agreements regarding the shares / partnership interests (including but not limited to pledges, security interests, options, nominee ships, trust agreements, usufruct, sub-participations)
  • All contracts, agreements and covenants between the entities being acquired and related entities (including but not limited to inter-company agreements, control agreements, agreements for the transfer of profits, business management agreements and integration agreements)
  • List of all managing directors and members of advisory boards (or of their committees)
  • Company development since foundation incl. key milestones and historical development

Agreements of Material Importance

  • Overview of all marketing, service and distribution agreements by region (including key details)
  • Overview of agreements with major customers (general terms of business, framework agreements, etc.), if any (including key details)
  • Overview of all material suppliers and customers by product line and region (including key details and any discounts if applicable)
  • All joint venture and co-operation agreements/ descriptions, if any with other enterprises
  • Overview of confidentiality agreements, non-competition agreements and related contracts
  • List of loan agreements, guarantee agreements, contracts of surety ship and other agreements regarding liabilities of third parties (including key details)
  • Shareholders loans
  • Security agreements, pledges, mortgages and other agreements establishing the rights of third parties to assets of the entities
  • List of all leases, financial leases, distribution agreements and any other contracts involving continuous obligations (including a summary of their contents)
  • List of main contracts with suppliers including key terms
  • Main contracts with distributors, licensees, agents or other persons involved in distribution
  • Secrecy agreements
  • All major existing consultancy agreements
  • List of all main insurance contracts including descriptions of risks covered and any pending damaging events
  • Standard forms used by the entities (including but not limited to general term and conditions, bills, order forms or warranties)
  • List of all other material agreements, especially with change-of-control clauses or which can be terminated only with several months’ notice or which provide for severance payments
  • All agreements with shareholders / partners and related persons, especially employment contracts, advisory agreements, lease agreements and loan agreements
  • All material contracts outside of the ordinary course of business (to the extent that they are not included above)

Real Estate

  • Description of the real estate owned by entities/ lease status (including key details)
  • Lease agreements regarding all real estate rented or let by the entities
  • Recent certified excerpts from the Land Register
  • Certified copies of the official ground plan for all the real estate
  • Information on any environmental matters

Intellectual Property and IT

  • Description of relevant (business critical) Intellectual Property Rights
  • Overview, descriptions and specifications of own and developed products as well as leased/rented
  • Patents and applications therefore
  • Trademarks and applications therefore
  • Copyrights (to the extent they are ascertainable or registered)
  • Utility models and registered designs (including applications therefore)
  • List of all licenses granted or taken
  • Description of IT infrastructure (incl. billing, customer tracking, etc.)
  • IT Hardware and software license description (incl. standard, technical and accounting software)
  • Description of R&D capabilities and product / technology road-map for coming years
  • Copies of research and development agreements to which the Group is a party
  • Details of whether and how any licenses, agreements or arrangements may be affected by the acquisition (breach, termination, etc.)
  • Details of existing or threatened litigation or other dispute resolution proceedings with regard to the infringement or validity of owned or third party IP or IT systems within the last 3 years or any circumstances which might give rise to such litigation or proceedings
  • Quality management certifications (Certificates, quality handbooks, audit reports)
  • Details of any Groups or business policies on data protection and the recording, monitoring and use of the telephone system, e-mail system and internet access

Labor Issues

  • Current average number of employees and historic development, by business unit, age profile, pay, lengths of service profile, technical skills (as FTEs and by headcount)
  • List of all additional compensation granted or promised in return for success or performance
  • Overview of all employers pension commitments and individual pension agreements and the group of affected employees
  • Standard form employment contract, including supplementary agreements (on secrecy, employee inventions, prohibition on competition etc.)
  • Copies of all shop agreements, collective bargaining agreements and other agreements between the entities and trade unions or employees’ councils
  • Information on any severance agreements with employees and former employees which have not been fully completed
  • Description of pending or planned offer of employment
  • Listing of loans granted to employees
  • List of visa applicants and status of their request
  • Copy of any report and investigations on health and safety problems and professional illness
  • Description of overall management structure and CVs of management and other key staff members

Compliance Issues

  • List of all licenses and public permits on the basis of which the entities carry out their business in its present form
  • List and copies of all rulings with official orders and directions (including but not limited to orders with regard to environmental protection)
  • List of all public grants and subsidies and descriptions of conditions of such grants and the repayment obligations

Operational & Technical Data

  • Standard operating procedures & manuals and analysis methodologies
  • Details of channel and alliance partners and sales composition arising there from. Provide copies of all such channel and sales partner arrangements
  • Sales by region and distribution channels, including development over time (historical & outlook). Status of sales pipeline by region, etc.
  • Product documentation & application as well as product pipeline

Litigation

  • List of all pending or threatened judicial and out of court disputes (including proceedings which have ended within the last 3 years)
  • Assessment of the risk of losses through respective disputes in the amount and probability

Financial information

  • Audited annual accounts of the parent company (non-consolidated and consolidated accounts) and all major affiliates for last 3 years
  • List of current account balances for last 3 years
  • Elimination of all extraordinary items (e.g. restructuring costs, legal disputes, extraordinary amortization of intangible assets or goodwill)
  • List of all public support programs
  • Monthly internal reporting for the last 3 years (management accounts)
  • Current year trading (monthly)
  • Projections of planning for next 5-7 years
  • Business plan, incl. detailed comment on all underlying assumptions
  • Description of capital expenditure items including break down per year for last three years as well as for the business plan period
  • Copies of all current internal financial projections, forecasts, budgets and cash flow analyses of the company and each other entity
  • Copies of accounting manuals, authorization manual and internal control procedure manuals
  • Analysis of revenue & EBITDA mix by product lines, distribution channels & regions
  • Analysis of revenue & EBITDA mix by customer
  • Basis for cost allocations and review of cost tracking systems to measure actual versus budgets. Briefly comment on the internal control systems adopted
  • Description and explanation of any extraordinary or significant non-recurring revenues and expenses during the last three years
  • Summary of accounts receivable as on date, with information on recoverability of amounts, customer contracts and project related references, credit terms associated, adjustments required if any, unbilled receivables, billing cycle. Provide Accounts Receivables ageing schedule with an analysis of bad debt reserve
  • Information on billed & unbilled receivables with specific focus on uncollectible
  • Monthly business metrics for the last 8 quarters including composition of revenues by revenue from distribution channels, regions, product lines, etc.
  • Description of all assets not required for operations
  • If not included in the above, please provide: a) break-out of direct and indirect costs and b) detail of non-recurring events

Taxes

  • Copies of all tax declarations and tax assessment notices of the entities within the last 5 years (including but not limited to corporate income tax, trade tax, VAT, social security tax and property tax)
  • Report on last tax audit and note on current or announced future tax audits
  • List of all unpaid tax debts
  • Complete description of all disputed with tax authorities

Market Overview

  • Description of relevant market and respective position of the Company in this market (Overview, size, historical development, trends, regional differences, influencing factors / drivers, critical success factors etc.)
  • Analysis of competitive environment
  • Analysis of strategy for technology/ product development
  • Description of market structure and value creation depth
  • Distribution of all available market reports

Other Information

  • Strategic focus / description of business model / depth of value creation and comment on future business potential
  • Company brochures, presentation, etc.
  • Copies of all newspaper articles and press releases of the entities within the last year if available
FAQ

Can I change requests in this checklist or add new?

Every M&A and due diligence process is different. Downloaders are urged to make these checklists their own by changing the providing information to better fit their needs.

Does this questionnaire provide all the necessary due diligence information?

Easily Collect Data Using this Template in DealRoom
How to use the template with DealRoom:
  • Download the due diligence template from DealRoom’s website
  • Open a room within DealRoom
  • Go to the Requests tab and select “import”
  • Import the downloaded template

The Requests tab is automatically populated with the requests from the due diligence template. Users can begin assigning, adding to, and completing due diligence requests.

Use DealRoom’s Premade Templates

Quick, easy download
Import into the room in a less than minute
Immediately begin requesting due diligence documents
or
M&A Science