Why does statutory due diligence matter so much for startups?

Because it is where early-stage deals actually stumble: a share allotment filed late or not at all, missing board minutes for past issuances, ESOP grants without a scheme properly adopted, unstamped share certificates, gaps in statutory registers, or founder agreements never signed. These are fixable - but only if found before the investor's counsel finds them. Most founder-side preparation focuses on the financial model and skips this entirely.

What goes into the data room you set up?

An indexed, folder-wise repository mapped to a standard investor checklist: corporate documents and cap table history, financial statements and MIS, tax filings and registrations, material contracts, employment and ESOP documents, IP assignments, licences, and litigation or notice disclosures - with a disclosure log so nothing surfaces as a surprise.

How long does DD preparation take?

For a typical early-stage company, 2-4 weeks for the review and report, plus remediation time for whatever surfaces - late filings to regularise, registers to reconstruct, agreements to execute. Starting before the term sheet, not after, is the single biggest time-saver in a round.

Do you act for investors as well as founders?

We take both founder-side (sell-side) preparation mandates and investor-side (buy-side) due diligence mandates - but never both sides of the same transaction. Independence on a deal is absolute.

How does DD connect with the valuation and the rest of the round?

Tightly. The same CA-led desk that prepares your DD also issues the Registered Valuer valuation for the allotment, handles the secretarial paperwork for the issue, and runs post-round reporting through Virtual CFO. Findings from DD feed directly into the valuation assumptions and the disclosure schedules - one team, one consistent story to the investor.

What does due diligence cost?

It depends on the company's age, transaction history and the depth the round demands - a two-year-old SaaS startup and a seven-year-old manufacturer are different engagements. We scope it on a call and quote a fixed fee before starting. Call 9311972982.

Due Diligence Services in Delhi | Financial & Statutory DD, Investor-Ready Report

Q: What does due diligence cover in a startup fundraise?

Three tracks. Financial due diligence tests the numbers - revenue quality and recognition, margins, working capital, debt, related-party transactions and the bridge from MIS to audited financials. Statutory and secretarial due diligence tests the paper trail - incorporation documents, share capital history, board and shareholder minutes, ROC filings, statutory registers, and licences. Tax due diligence tests the compliance record - GST, TDS, income tax positions, and open notices or assessments. Investors examine all three; a founder should too, before the investor does.

Q: What is an investor-ready (sell-side) DD report?

It is due diligence you commission on your own company before the round - the same checks an investor's team will run, done early, with time to fix what surfaces. The output is a structured report plus a clean, indexed data room. Deals rarely die because a problem exists; they die because the investor finds it first, late, and unexplained.

In a Nutshell: Due Diligence Before the Investor Does It

Startup Advisory runs financial due diligence (revenue quality, working capital, related-party transactions), statutory & secretarial due diligence (share capital history, ROC filings, minutes, registers — where early-stage deals actually stumble) and tax compliance review — delivered as an investor-ready DD report with an indexed data room and a remediation plan. Founder-side preparation before the round, or investor-side DD on a target — never both sides of one deal.

Financial DD: revenue recognition, margins, working capital, debt, RPTs, MIS-to-audit bridge.
Statutory DD: incorporation & share capital trail, board/shareholder minutes, ROC filings, registers, ESOP paperwork, licences.
Tax DD: GST, TDS and income tax positions, open notices and assessments.
Deliverables: investor-ready DD report + indexed data room + red-flag remediation plan.
Timeline: typically 2–4 weeks for review and report; start before the term sheet.
Provider: Startup Advisory, CA firm in Saket, New Delhi 110030. Call 9311972982.

Reviewed by CA Neeraj Rohilla, FCA — Chartered Accountant, Startup Advisory, Saket, New Delhi.

Deals Don’t Die Because Problems Exist — They Die Because the Investor Finds Them First

Every funding round ends in the same room: the investor’s diligence team, your documents, and questions. The founders who close fast are not the ones with perfect histories — they are the ones who ran the same checks on themselves months earlier, fixed what could be fixed, and disclosed the rest on their own terms. That is what our investor-ready due diligence engagement does: financial, statutory and tax review by one CA-led desk in Saket, an indexed data room mapped to a standard investor checklist, and a remediation plan for the red flags.

The three tracks we run

Financial due diligence: revenue quality and recognition, gross-margin integrity, working capital cycles, debt and contingent liabilities, related-party transactions, and the bridge from your MIS to the audited financials investors will actually read.
Statutory & secretarial due diligence: the paper trail early-stage deals stumble on — share capital and allotment history, PAS filings, board and shareholder minutes, statutory registers, ESOP scheme adoption and grants, share certificates and stamping, founder and IP-assignment agreements, business licences.
Tax compliance review: GST and TDS filing history and reconciliations, income tax positions, and open notices or assessments — disclosed and quantified before they surface as deductions from your valuation.

Deliverables

Investor-ready DD report — structured findings, quantified exposures, and management responses drafted with you.
Indexed data room mapped to a standard investor checklist, with a disclosure log.
Remediation plan — late filings regularised, registers reconstructed, agreements executed, before the investor’s counsel arrives.

DD findings feed straight into the Registered Valuer valuation for the allotment and into post-round reporting under Virtual CFO — one team, one consistent story to the investor. We also take investor-side (buy-side) DD mandates on targets; never both sides of the same transaction.

How the DD engagement runs

Step 1 — Scoping call: stage, investor type and timeline decide the depth — a seed bridge and a Series A get different treatments, and we say which you need rather than selling the bigger one.
Step 2 — Data room build: a structured index (corporate, financial, tax, secretarial, contracts, HR/ESOP) populated from your records — the skeleton investors expect to see.
Step 3 — Review: the three tracks run in parallel — financial, statutory & secretarial, tax — each producing findings graded by deal impact.
Step 4 — Red-flag report & remediation plan: what will surface, how bad it is, what is fixable before the investor sees it, and what must simply be disclosed with a clean explanation.
Step 5 — Deal support: when the investor’s DD team arrives, we sit on your side of the table for the queries.

What investor DD teams actually check

Not just the P&L. The share capital trail from incorporation to today (every allotment, transfer and form filed), whether revenue recognised matches GST returns and bank credits, related-party transactions and their approvals, ESOP grants against a valid scheme and pool, statutory dues (TDS, GST, PF/ESI) deposited on time, open notices and litigation, and whether the MIS the deck quoted reconciles to the audited books. Every one of these is checkable from public and internal records — which means every gap is findable. The only question is who finds it first: you, or their team.

The deal-killers we fix most often

Broken share capital trail: allotments without corresponding filings or consideration proof — the single most common reason closing gets delayed by weeks.
Founder loans and RPTs without paperwork: money moved between founder and company with no agreements, board approvals or interest treatment.
Books-to-GST mismatch: turnover in the financials that does not reconcile to GST returns — investors read this as either sloppiness or something worse, and neither prices well.
ESOPs promised, not papered: offer letters mentioning options with no scheme, no pool, no grants — a liability sitting in your best employees’ inboxes.
MIS that outruns the books: a deck claiming numbers the audited statements cannot support — fixable with an MIS-to-audit bridge, fatal without one.

Frequently Asked Questions

Three tracks: financial DD (revenue quality, margins, working capital, debt, related-party transactions, MIS-to-audit bridge), statutory & secretarial DD (incorporation documents, share capital history, minutes, ROC filings, registers, licences) and tax DD (GST, TDS, income tax positions and open notices). Investors examine all three — a founder should too, first.

Due diligence you commission on your own company before the round — the same checks an investor’s team will run, done early, with time to fix what surfaces. The output is a structured report plus a clean, indexed data room.

Because it is where early-stage deals actually stumble: allotments filed late, missing minutes for past issuances, ESOP grants without a properly adopted scheme, unstamped share certificates, register gaps, unsigned founder agreements. All fixable — if found before the investor’s counsel finds them.

An indexed, folder-wise repository mapped to a standard investor checklist: corporate documents and cap table history, financials and MIS, tax filings, material contracts, employment and ESOP documents, IP assignments, licences, and litigation/notice disclosures — with a disclosure log so nothing surfaces as a surprise.

Typically 2–4 weeks for the review and report, plus remediation time for whatever surfaces. Starting before the term sheet, not after, is the single biggest time-saver in a round.

Yes — founder-side (sell-side) preparation mandates and investor-side (buy-side) DD mandates, but never both sides of the same transaction. Independence on a deal is absolute.

The same CA-led desk that prepares your DD also issues the Registered Valuer valuation for the allotment, handles the secretarial paperwork, and runs post-round reporting through Virtual CFO. Findings feed directly into the valuation assumptions and disclosure schedules.

It depends on the company’s age, transaction history and the depth the round demands. We scope it on a call and quote a fixed fee before starting. Call 9311972982.

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