Glossary · Fundraising process · Updated 28 August 2026
Due diligence is the audit an investor runs after the term sheet to confirm the company is what it claimed to be. It covers legal, financial, product, commercial and team, and typically takes four to eight weeks on a European seed round.
Due diligence is not an exam you pass or fail: it is a search for discrepancies. The investor compares what you said in meetings with what the documents say. A discrepancy you disclose is almost never fatal. One the investor finds is expensive in trust, and is usually paid for in valuation.
The pace is set by how fast you can answer, not by how fast they can ask. Every missing document adds a round trip, and every round trip adds days. That is why a dataroom built before the process starts, rather than during it, is the highest-return preparation in the whole raise.
At pre-seed and small seed the audit stays light and focuses on corporate housekeeping and the team. From Series A onward it gets serious: external financial audit, reference calls with your customers, sometimes a code review, and a line-by-line check of intellectual property ownership.
Example: a seed due diligence timeline
A €1.5M round, term sheet signed on the 1st. This is how a process that goes well actually unfolds.
| Weeks 1–2 | Corporate and legal: articles, cap table, employment contracts, IP |
|---|---|
| Weeks 2–4 | Financial: accounts, forecast, cohorts, unit economics |
| Weeks 3–5 | Product and technical: architecture, technical debt, roadmap |
| Weeks 4–6 | Commercial: customer reference calls, pipeline, churn |
| Weeks 6–8 | Legal documentation and closing |
| Median total | 4 to 8 weeks |
| Cost of an incomplete dataroom | +2 to 3 weeks |
The workstreams overlap: the investor starts on financials before finishing legal. That is why a gap in a single area does not delay that area, it delays the entire closing.
The common mistake
Building the dataroom request by request. You end up reacting, out of order, and each document sent in isolation raises one more question. Preparing the full set before the first meeting changes the dynamic entirely.
Frequently asked questions
How long does due diligence take?+
Four to eight weeks on a European seed, longer from Series A where an external financial audit is involved. The biggest variable is not round size but how complete the dataroom is on day one.
What happens if due diligence uncovers a problem?+
It depends on the problem, and far more on how it surfaced. A dispute or a doubtful receivable you disclose up front gets negotiated. The same items discovered by the investor put the term sheet back in play, usually through a lower valuation or stronger warranties.
Related terms
Prepare your raise with the right documents
Onefive brings the dataroom, the investor network and the startup profile into one workspace, built for European teams from pre-seed to Series A.
