Everything an investor will ask for.

A term sheet arrives and everyone is delighted for about a day. Then the diligence list lands, and the next three weeks go on finding documents: the share certificates from the angel round, the IP assignment nobody remembers signing, twenty-four months of bank statements, the ESOP grant letters that were promised in offer letters and never issued.

Meanwhile the business still needs running, the month still needs closing, and every day the process stays open is a day something can change: a market, a fund's appetite, a key customer.

None of that work is hard. It's just slow, and almost all of it can be done before anyone asks. A data room built quietly over a quarter costs an hour a week. Built after a term sheet, it costs the founder's attention at exactly the moment the company needs it most.

Most of the checklist is straightforward retrieval. Four items regularly take weeks rather than hours, and they're the ones to start on first.

1. 01A cap table that reconciles to the statutory registers. Fixing a mismatch involves your company secretary, past filings and sometimes past investors. It stops rounds dead and it cannot be rushed.
2. 02ESOP records. Grants promised in offer letters but never approved by the board, grant letters never issued, leavers whose options were never cancelled. Reconstructing the record and getting approvals takes time and legal input.
3. 03IP assignments. Founders, employees and especially contractors who built part of the product. Chasing a signature from someone who left two years ago is slow, and an investor will insist.
4. 04The three-way GST reconciliation. Books against GSTR-3B against GSTR-2B for two years. If nobody has been doing it monthly, expect gaps, and expect some to need regularising with interest.

Everything else on the list is a folder and an afternoon. These four are projects, which is exactly why they should start six months before the round rather than three weeks after the term sheet. Each one also depends on someone outside the company, which is the real reason they cannot be rushed.

1. 01Create a folder for each of the eight sections, in the same order, in whatever drive you already use.
2. 02Go down the list marking each item Ready, In progress, Missing or Not applicable, and put a name against every item that isn't Ready.
3. 03Count the Missing items. The sheet does it for you. That number is your honest readiness score.
4. 04Work the Missing list weekly, starting with the four above, and record the link to each document as it lands.
5. 05Read the Questions sheet and prepare written answers with evidence attached, because documents alone never satisfy a diligence team.
6. 06Keep it current afterwards. A data room that is maintained monthly is ready whenever a conversation turns serious.

Most founders find between a third and half the list already exists somewhere. The value of the checklist is finding out which parts don't, and how long those parts will take, while the answer is still an inconvenience rather than a problem.

• ·Use numbered folders matching the checklist, so an investor can find their way around it without asking.
• ·Name files consistently: document, entity, date. A folder of files called final_v3_updated helps nobody.
• ·Keep access read-only, grant it per investor, and revoke it when a process ends.
• ·Track who has access and when it was given. You'll want that record later.
• ·Redact personal data, such as employee identifiers and bank details, where it isn't needed for diligence.
• ·Don't put anything in the room you haven't read. A document that exists and contradicts your numbers is worse than one that's missing.
• ·Keep a document index with a date against each item, so everyone knows what's current.

If you're starting from scattered folders and an inbox, this order works, at roughly two or three hours a week.

1. 01Week 1: folders created, checklist filled in honestly, owners assigned. Start the cap table reconciliation with your company secretary, since it has the longest lead time.
2. 02Week 2: financial section. Audited accounts, monthly management accounts, MIS as sent, bank statements. Anything that needs rebuilding surfaces here.
3. 03Week 3: tax and statutory. GST and TDS reconciliations for the last two years, with your CA. Expect this to take longer than planned.
4. 04Week 4: contracts. Customer agreements, vendor contracts, leases, insurance. Chase the missing signatures now, because they depend on other people.
5. 05Week 5: people, ESOP and IP. Employee list and agreements, grant records, IP assignments, including from contractors who have left.
6. 06Week 6: metrics, definitions and the written answers to the Questions sheet. Then read the room as an outsider would, and fix what confuses you.

Six weeks of light effort, done before a term sheet, removes the part of a fundraise that founders describe afterwards as the worst month of the process.

The second sheet lists twelve questions that come up in almost every process, with where your answer should come from. They matter because diligence is not really a document exercise; the documents exist to support answers.

Examples: how is revenue recognised, and does it differ from invoicing? Can revenue be reconciled to the bank for each of the last 24 months? What one-off items are in the P&L? What liabilities aren't on the balance sheet? What did the last round's money actually fund? What would you cut to reach break-even?

Write the answers down before you're asked. Not because the answers are hard, but because writing them reveals which ones you can't yet support with evidence, which is the entire point of preparing early. Keep the answers in the room itself, in a short memo, and update it as things change.

Diligence teams form an impression long before they finish reading, and it comes from a handful of signals.

• ·Whether the numbers in the model, the MIS and the audited accounts agree with each other.
• ·Whether the cap table in the room matches what the deck said about ownership.
• ·Whether the monthly MIS packs look consistent across two years, or appear to have been produced recently in one batch.
• ·Whether metric definitions are written down anywhere.
• ·Whether the statutory dues schedule shows things paid on time.
• ·Whether anything obvious is missing from a folder that clearly should contain it.

None of those requires a good quarter or a great business. They require a company that has kept its records, which is why a prepared data room often shifts the tone of a process before a single number is questioned.

Everything on this list is a record a company should be able to produce anyway: statutory registers, tax reconciliations, signed contracts, IP assignments. A bank, an acquirer, an auditor or a large customer's procurement team will ask for some of it too.

So a bootstrapped company that never raises still benefits from working through it once and keeping it current. It takes a few weeks of light effort and removes an entire category of future emergency.

There is a quieter benefit too. Working down the list usually turns up something worth knowing: a contract that auto-renewed on worse terms, an IP assignment that was never signed, a statutory registration nobody has kept current. Finding those while nothing depends on them is far better than finding them in a week when everything does.