Startup Data Room Checklist

Start from your company's facts, not a generic list. Each fact switches a section on or off, or multiplies it: three contractors who wrote code means three IP assignments to find.

Number documents by section (1.01, 1.02) and never renumber, since requests will cite the numbers. Give a section that doesn't apply a one-line reason, such as "No patents; the code is protected by copyright." An empty folder reads as an omission.

Reconcile the cap table to the signed documents behind each row, not to last year's spreadsheet. The startup cap table template shows how.

A completeness percentage counts files, so the easy ones move it most. Track every missing document by two fields instead. The actor is who has to act: you, a counterparty you already work with, or a third party with no reason to hurry, like a former contractor. The chain is each step in working days, waiting included.

The gaps run in parallel, so the room is ready when the longest chain ends, not when their total is done. Send third-party requests on day one, however small the document, since their chains hold a queue you don't control.

Many serious problems sit inside documents you already have, starting with who owns the product. Under US copyright law, a contractor's work is made for hire only in nine listed categories¹, like an atlas, and only under a signed agreement saying so. Software isn't on the list, so code a contractor wrote generally stays theirs until they sign an assignment.

In the model stock purchase agreement² from the National Venture Capital Association (NVCA), the company states that every current and former consultant who worked on its IP has assigned it. Read each contractor agreement for that assignment, then fix or disclose any gap. The contractor IP assignment template finds who never signed.

Also check founders' old employment agreements, which may give a former employer a claim on early work, and change-of-control clauses in big contracts.

Two more problems have bright lines. The SEC says a company selling under Regulation D must file a Form D notice within 15 days after the first sale³, counted from the first investor's irrevocable commitment. Check each earlier Regulation D round for its filing.

Option strike prices rest on a valuation under the section 409A tax rules. A valuation stops being reasonable once it's more than 12 months old⁴, or sooner if it misses later news that may materially affect value. Check every grant date against the valuation date behind it.

Contractor status has no such line. The IRS weighs evidence of behavioral control, financial control and the type of relationship⁵, and says no set number of factors decides it. Test a doubtful case with the contractor vs employee classification check.

Write every problem into one known issues note, and put it in the room before anyone asks. An issue you raise gets discussed on your terms, with the fix underway. Found by the investors' counsel in week three, it gets discussed on theirs.

The same NVCA agreement says the company's formal statements, called representations, are true "except as set forth on the Disclosure Schedule"². Investors don't have to close unless those statements, as modified by that schedule, are true. The agreement adds that nothing investors learn in diligence changes them, so don't count on a document in the room as disclosure.

Route each issue to where it should land:

• Closing condition: fixed before the money moves, like a missing IP assignment
• Disclosure schedule: listed as an exception, like a late Form D now filed
• Indemnity or escrow: a promise to pay for, or money held against, one known risk, like a tax assessment under appeal
• Price or terms: a change to the valuation or structure, like a big customer who can leave on 30 days' notice

Give each entry what it is, how it arose, what it affects, its size and your fix. State facts, not conclusions: "the contractor's code was never assigned" is a fact; "this doesn't affect our ownership" is for counsel to say.

A data room is a disclosure, not a filing cabinet, so open it in three stages:

1. 1

   Before a term sheet

   The index, corporate and equity records, financial statements and the known issues note.

2. 2

   After a signed term sheet

   Contracts, redacted where required, plus IP, people records with pay grouped by role, insurance, and privacy and security.

3. 3

   In confirmatory diligence

   Named salaries, unredacted contracts, litigation detail and anything the deal now turns on.

Each person gets their own login, never a shared link or one login for a whole fund. You'll see who opened what, and you can revoke access if the deal falls through. Log every document added, replaced or redacted with its date, and never backdate an entry.

Staging also protects secrets. Under federal law, information counts as a trade secret only if its owner has taken reasonable measures to keep it secret⁶. Share source code and pricing models last, under a confidentiality agreement.

Once diligence opens, sort each request. A lookup asks for a document that exists, an answer needs a fact confirmed, and analysis needs something new built. Send each lookup to the document's owner, not to whoever the email reached.

Log who answered each request and how many working days it took. In the template's made-up example, the CEO got 21 of 38 requests, 13 of them simple lookups. The CEO's median was 9 working days, against 3 for everyone else. The fix is deciding who else may answer, not working harder.

River can build this template's index from your company's own facts and work out the ready date with you.