Preparing for Due Diligence from Day One

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When raising $22M for AppSignal, we technically had every document we needed. Somewhere.

Revenue spreadsheets? Let me export a P&L from Moneybird and massage it in Excel. Contracts? Some were in PandaDoc, others buried in my inbox. Cap table and dividend distributions? Let me track down those PDFs. CIT returns? Logging into the accountant’s portal.

Truthfully, a lot of what I needed was where it should be, properly stored in Google Drive by our operations manager or me. But not everything. And when you’re under the microscope, being unable to produce a document quickly doesn’t look great.

The result? Unnecessary stress. Late nights. Re-downloading. Re-formatting. Re-finding. Not because we hadn’t done the work, but because we hadn’t stored everything as if someone else would eventually need to review all of it.

If you’re building something valuable, assume someone will want to look under the hood one day. The good news? A little structure from day one can save you and your future self a massive amount of work later. Set your startup up for due diligence success before you think you need to.

Due Diligence Is a Stress Test You Can Prepare For

Raising capital isn’t just about your vision: it’s about validation. Investors will scrutinize your financials, legal agreements, product usage data, and more. They’re not just looking for red flags but checking to see if you run a tight ship. And when you’re already juggling product, customers, and team responsibilities, the last thing you need is an unexpected game of “document scavenger hunt.”

Knowing exactly where to find a file without hunting across platforms is a huge win, mentally and operationally.

What I’d Do Differently from Day One

We didn’t not have the documents. We just didn’t think ahead to how someone else would need to view them. If I were starting over tomorrow, here’s how I’d approach our document hygiene:

1. Create a Master “Due Diligence” Folder from the Start

Even if you’re not planning to raise funds for years (or ever), create the structure now. This virtual filing cabinet will be handy when looking for whatever, so you can use it anyway. Suggested folder structure:

Corporate & Legal

  • Articles of Incorporation
  • Shareholder Agreements
  • Board Meeting Minutes
  • Cap Table & Equity Documents (including history)
  • IP Assignments / Licenses
  • Contracts & Agreements (customer, partner, vendor, NDAs)
  • Compliance Documents (GDPR, ISO27001, HIPAA, etc.)

Financials

  • Historical Financial Statements (3–5 years: P&L, Balance sheet, cash flow)
  • Forecasts & Projections
  • Tax Filings (VAT, Corporate Income Tax, Dividend Withholding Tax, etc.)

Product & Technology

  • System Architecture Diagrams
  • Relevant Github Repositories (links with descriptions)
  • Dev Process & Methodologies
  • Technical Debt Overview
  • Security Policies & Pen Tests
  • Disaster Recovery Plan

Customers & Revenue

  • Customer List (top 10 customers by revenue, anonymized)
  • Churn / Retention Reports (including effects of previous price increases)
  • Customer Acquisition Cost (CAC) / LTV
  • Revenue Breakdown (by product, customer, geography)
  • Support Metrics / NPS / Feedback
  • Pricing Models

Team & HR

  • Organizational Chart
  • Employee Roster
  • Employee Contracts / Offer Letters
  • Compensation Plans & Benefits
  • Contracting & EOR Agreements
  • ESOP, SARs & Options
  • Employee Handbook (in our case, linking to the GitHub repository)

Operations & Admin

  • Internal Policies & Procedures
  • Tools Used (e.g., Moneybird, Intercom, Stripe, etc.)
  • Vendor / Supplier Contracts
  • Insurance Policies
  • Lease Agreements

2. Standardize File Names and Formats

Every document should be easy to understand at a glance. I’ve opened far too many PDFs only to find everything except what I was looking for.

3. Pick a Single Source of Truth

Every document should be easy to understand at a glance. I’ve opened too many PDFs to find everything except what I was looking for.

Don’t scatter your documents across Gmail, Notion, Dropbox, and random Google Drives. Choose one primary storage platform (e.g., Google Drive or Dropbox) and stick to it. I’d go with a shared Google Drive folder so selected coworkers can contribute.

4. Tag Key Docs in Real Time

Just signed a major contract? Move it to the correct folder immediately. Closed your year-end financials? Save a clean, clearly named PDF. SaaS metrics and tax filings? Update quarterly. Make this an ongoing habit, not a last-minute scramble.

5. Use a Diligence Checklist Early

You don’t need to fill in every line immediately, but start building a due diligence checklist. Think of it as a living inventory of proof points. Use the folder structure above as your guide.

Build Like Someone’s Watching (Because Eventually, They Will Be)

Building a company is hard enough. Scrambling to prove its legitimacy retroactively is avoidable pain. We did gather everything for our raise, without missing a single document, but it was more work than it needed to be, simply because we hadn’t built our house with guests in mind.

So build it now. File it once. Sleep better later. Future You will be very, very grateful.