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The Complete Startup Due Diligence Checklist for Investors (2026)

Whether you're a first-time angel or a seasoned VC partner, a structured due diligence process prevents expensive mistakes. This checklist covers every dimension — 50+ questions organized by category.

🧑‍💼 Team & Founders

Do founders have deep domain expertise in the target market?
Is there complementary skill coverage (business + technical + operations)?
How fast has the team executed? (Time from idea → prototype → first customer)
Have they worked together before? Prior co-founding experience reduces conflict risk by 70%
What's the cap table structure? Are founders sufficiently incentivized?
Key person risk: What happens if the CEO or CTO leaves?
What's the hiring velocity and quality? Are they attracting A-players?
Reference checks: What do former colleagues and employees say?

📊 Market & Competition

Is the market growing? What's the growth rate (not just TAM)?
Market Velocity: Is the problem getting more urgent over time?
Who are the top 5 competitors? What's the differentiation?
Switching costs: How sticky is the product once adopted?
Regulatory tailwinds or headwinds? New regulations creating demand?
Platform risk: Dependent on a single distribution channel or ecosystem?
International expansion potential: Can this work outside the home market?

📦 Product & Technology

Is there demonstrable product-market fit? (>40% "very disappointed" on Sean Ellis test)
Technical architecture: Scalable, or will it need a rewrite at 10x users?
IP protection: Patents, trade secrets, proprietary data?
AI dependency: If using AI, does it have a genuine data moat or is it a wrapper?
User engagement: DAU/MAU ratio, session frequency, retention curves
NPS score: >50 is strong, >70 is exceptional

💰 Financial Metrics

Revenue: ARR/MRR and growth rate
Gross margin: >70% for SaaS, >60% for AI-heavy products
Burn rate and runway: >18 months post-raise?
Burn Multiplier: Net Burn / Net New ARR (<1.5x at Series A)
Net Revenue Retention: >100%? >120%?
LTV/CAC ratio: >3x with <18 month payback
Magic Number: >0.75 signals efficient GTM
Revenue concentration: Top customer <15% of revenue?
Unit economics: Positive contribution margin per customer?

⚖️ Legal & Governance

Clean cap table? No unusual provisions or side letters?
Outstanding litigation or IP disputes?
Data privacy compliance (GDPR, CCPA, SOC 2)?
Key contracts: Customer terms, vendor dependencies, partnership agreements
Employee agreements: IP assignment, non-competes, option pool
Regulatory compliance status and pending applications

🔮 Investment Terms

Valuation relative to stage and metrics (not just comparable rounds)
Liquidation preferences: Participating vs. non-participating?
Board composition and governance rights
Pro-rata rights for follow-on investment
Information rights: Monthly/quarterly reporting commitments
Anti-dilution provisions

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This checklist takes 40-80 hours to complete manually. PV1 automates the quantitative dimensions — team assessment, market timing, financial benchmarking, and competitive positioning — in 15 minutes, so you can focus your time on the qualitative elements that require human judgment.

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