The founder-side diligence prep timeline

Diligence is a fire drill only if you start when the term sheet lands. The founders who close cleanly begin weeks earlier — and they sequence the work by deal impact, not by what's easy. This is an eight-week plan that puts the fatal ownership items first and the polish last, so that when a room goes live nothing surfaces to surprise you.

Sequence by damage, not by ease. The instinct is to knock out the easy hygiene items first because they feel productive. Resist it. The items that end a deal — IP ownership, prior-employer claims, off-ledger equity — are also the ones that take longest to fix (you're chasing signatures from people who've left). Start those in week one; save the good-standing certificate for the final sprint.

Week 8–6: the fatal items

Weeks 8–6 · before you even start the raise

Clear the things that can't be fixed late

Goal: zero open weight-3 ownership items. These take the longest and cannot be patched in a live room.

IP assignments for every contributor — founders, employees, contractors, the freelancer who built the MVP. Chase down anyone who's left. A present-tense assignment, not an NDA.
Prior-employer review — collect each founder's prior-employer agreements, have counsel read the invention-assignment and non-compete clauses, paper a clean rep.
Off-ledger equity reconciliation — reconcile every equity conversation against the cap table; paper the real ones with vesting, get releases for stale claims.
Founder vesting — if founder shares aren't on a vesting schedule, put them on one (with 83(b) evidence). Investors require it before they wire.

Week 5–4: the foundation

Weeks 5–4

Make the cap table and the SAFE stack tie out

Goal: a fully-diluted cap table that reconciles, and a SAFE stack you've modeled yourself.

Reconcile the FD cap table to the share ledger and every issuance consent. This is the foundation the whole room is built on.
Build the one-page SAFE summary — cap, discount, MFN, pro-rata per holder — and compute the combined conversion. Know your dilution number before anyone models it for you. See how SAFEs convert.
Model the pool shuffle so you know what a refresh costs you before a lead names a number. See the option-pool shuffle.
Paper the option grants — board approval, current 409A, signed agreements. No "promised but not papered" grants.

Week 3–2: the room

Weeks 3–2

Build the data room and reconcile the financials

Goal: a room organized to match how counsel reads it, with financials that tie to the bank.

Build the nine-folder room in deal-impact order — cap table, IP and convertibles up front.
Reconcile 12+ months of monthly financials to bank statements; fix any aggressive revenue recognition now, before a QoE restates it for you.
Pull metric exports from source systems so headline numbers match what diligence will re-derive.
Flag contract landmines — change-of-control, assignment, exclusivity across your top contracts.

Week 1: the final sprint

Week 1 · before the room opens

Polish, hygiene, and a dry run

Goal: the low-weight items done, and a walkthrough as if you were the investor's counsel.

Good-standing and franchise tax — get the certificates, pay anything outstanding.
Related-party and founder-loan schedules — documented at arm's length.
Litigation and privacy — a clean rep or a disclosed schedule; privacy policy and DPAs in place.
Dry run the room — open it as if you were the buyer's counsel and try to break your own story. Every question you can't answer from a folder is a gap to close before someone external finds it.

The timeline at a glance

When	Focus	Done means
8–6 weeks out	Fatal ownership items	Zero open weight-3 IP / equity items
5–4 weeks out	Cap table & dilution	Table reconciles; you know your real number
3–2 weeks out	Room & financials	Room built; financials tie to bank
1 week out	Hygiene & dry run	Low-weight items closed; room passes your own review

Compressed timeline? If a term sheet is already on the table and you have a week, not eight, invert nothing — still do the fatal items first, just faster, and be honest with the other side about what's in flight. A disclosed gap you're actively closing costs far less trust than one they discover. What you cannot do is skip the ownership items; those are the ones a room can't route around.

Get your prep sequenced for you.

The $79 report scores your kill-list, orders your open gaps by deal impact — fatal items first — and maps each to the document that clears it. It turns this generic timeline into your work-order, and if you add your cap table, computes your dilution alongside.

Get the report — $79 →

FAQ

How long does diligence itself take?

For a priced venture round, confirmatory diligence typically runs a few weeks after the term sheet; a full acquisition diligence can run 1–3 months. But the prep window is what you control — starting eight weeks before you raise means the room is ready the day a lead asks for access, instead of the deal waiting on you.

Do I really need eight weeks?

Not always — a clean, early-stage company with few contributors and no SAFE stack can be ready in two. The eight-week plan is sized for the founder who has real gaps to close (departed contributors to chase, a messy cap table, aggressive revenue). The point is to know which bucket you're in before you start raising.

What if I find a fatal item with no time to fix it?

Disclose it, scope the fix, and be transparent about the timeline. Buyers price uncertainty, and a disclosed-and-being-fixed item is far cheaper than a discovered one. What poisons a deal is discovery — the impression that you either didn't know your own company or hid what you did know.

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