Founders and CFOs
Due diligence readiness for founders
Run this before a process starts, not during one.
Diligence readiness comes down to four things: your numbers reconcile to a source, you own what you say you own, your contracts survive a change of control, and your records can be produced without a scramble. Work through each section and mark every item ready, gap or unknown. The unknowns are what cost you time later.
30 items, 6 sectionsUpdated
Numbers reconcile
- Management accounts reconcile to the bank and to the accounting system, monthly, for 24 months
- Revenue recognition policy is written down and applied consistently
- Any adjustments or normalisations are documented with a reason, not just a number
- The forecast connects to the history, using the same account structure
- Working capital is measurable at any month end without rebuilding it
You own what you claim
- Every founder has a signed IP assignment
- Every contractor who wrote code or created designs has assigned that work
- Trade marks are registered in the classes that matter, and renewals are current
- Domains are held in the company name, not a personal account
- Open source licences in use are compatible with how you sell
Contracts survive the deal
- Every material contract has been read for change of control language, and the list is written down
- Contracts are signed by both parties, and the executed copies are findable
- Customer contracts match the pricing shown in your reporting
- Supplier terms do not contain exclusivity or assignment restrictions you have forgotten
- Any consent required for a transaction is identified with a named counterparty contact
People and compliance
- Employment contracts exist for every employee, matching current role and pay
- Contractor arrangements are genuinely contractor arrangements, tested against current rules
- Superannuation has been paid on time, and any shortfall is quantified
- Award coverage and classification has been checked, not assumed
- The ESOP paperwork matches what people believe they hold
Records can be produced
- One system of record per category, not four folders across three drives
- Documents are named so a stranger can identify them without opening them
- Superseded versions are archived, not left beside the current one
- Personal information is identified so it can be redacted or excluded quickly
- Someone is nominated to own the data room and answer questions within one business day
Common findings that cause delay
- Missing IP assignment from an early contractor, discovered in week three
- A key customer contract that was never signed
- Superannuation underpayment across several quarters
- Revenue in the deck that cannot be traced to the ledger
- A cap table in a spreadsheet that does not match the share register
Frequently asked
- When should a founder start getting diligence ready?
- Six to twelve months before a process. The items that take longest, such as IP assignments, unsigned contracts and superannuation shortfalls, cannot be fixed in the middle of diligence without disclosing them.
- What is the single most common readiness gap?
- Numbers that do not reconcile to a source. Everything else can be explained; a revenue figure that cannot be traced to the ledger makes a buyer question every other figure you have given them.
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