Business Valuation & Diligence — Investor Due Diligence
Due diligence is where fundraising deals actually stall — not at the term sheet, but in the weeks after, when investors start asking for documents that don't exist or don't reconcile. FMCA organizes the data room, reviews the financial and legal record, and surfaces the issues an investor will find anyway, before they become a renegotiation.
Reviewed by FMCA's Senior Fundraising Advisory Team — supporting SME and startup capital raises across the UAE and Saudi Arabia.
Four areas of preparation work, built around what investors actually request once a term sheet is signed.
Documents organized into a structured data room before diligence starts, in the format investors expect to review.
Historical financials reconciled and organized so numbers match across statements, cap table and projections — the first thing diligence checks.
Incorporation documents, contracts and IP assignments reviewed for gaps before an investor's lawyers find them first.
Known issues — messy cap tables, missing agreements, unreconciled numbers — fixed or explained before diligence surfaces them as surprises.
A term sheet is a signal of intent, not a closed deal — diligence is where deals actually die.
Every missing document or unreconciled number extends the timeline — and momentum, once lost, is hard to recover in a fundraising process.
Surprises found in diligence — not the underlying facts themselves — are what most often trigger a reduced valuation or new conditions late in the process.
A serious enough surprise — an IP gap, an undisclosed liability, numbers that don't reconcile — can end a deal that had already reached a term sheet.
Diligence tests the same numbers a valuation is built on — see Business Valuation for how the two connect.
What investors actually check scales with round size — preparing for the wrong depth wastes time either way.
Our Approach
Generic data-room checklists miss the specific issues that actually derail deals — a messy cap table, an undocumented related-party loan, an IP assignment that was never formalized. FMCA's team has sat on both sides of diligence, and reviews your record the way an investor's advisors actually will.
How We Work
Illustrative scenarios based on the kind of work we do — not descriptions of specific named clients.
A full data room organized before the term sheet was even signed, compressing what would typically be a multi-week diligence process into days.
An informally tracked cap table with undocumented option grants was reconstructed and formalized before it could raise questions during investor review.
An IP assignment that was never formally executed at incorporation was identified and corrected before diligence, rather than surfacing as a red flag mid-deal.
Related Insights
FAQ
It varies by round size and preparation — a well-organized data room can compress diligence to days or a couple of weeks, while an unprepared one can stretch it to months.
Incorporation documents, cap table history, financial statements, material contracts, IP assignments and employment agreements are the core — the specific list scales with round size and investor sophistication.
Yes — a disclosed and explained issue reads as diligence on the founder's part. The same issue discovered independently by investors reads as a trust problem, even if the underlying fact is identical.
Yes, significantly — seed diligence is typically lighter-touch, while Series A and later rounds involve full financial, legal and operational review, often with external advisors on the investor's side.
Yes — a term sheet signals intent, not a completed deal. A serious enough surprise found during diligence can end the deal or force a materially reduced valuation.
Tell us where things stand and a senior consultant will get back to you directly — not a call centre.
