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Entrepreneurship & Startups vocabulary · Fundraising & Investors

Due diligence

Meaning in entrepreneurship & startups, with examples

/ˌduː ˈdɪlɪdʒəns/nounCommon term

In entrepreneurship & startups, due diligence means: A careful check that investors or buyers do before a deal, reviewing a company's finances, contracts, legal status, technology and team to find any risks.

In Turkish: durum tespiti, hukuki ve mali inceleme, due diligence

How it is used

Happens after a term sheet and before the money arrives. Investors do, carry out or complete due diligence; founders prepare a data room with the documents. Often shortened to DD. Legal, financial and technical due diligence are often done by different experts.

Example sentences

  1. Due diligence took six weeks because our contracts were spread across three folders.

  2. The fund is doing technical due diligence on our platform this week.

Common collocations

  • do due diligence
  • legal due diligence
  • technical due diligence
  • due diligence process
  • data room
  • term sheetA short document that lists the main terms of a proposed investment, such as the amount, valuation and investor rights, before the final legal contracts are written.
  • investorA person or organisation that puts money into a company in exchange for a share of it or a future return, hoping the company will grow in value.
  • intellectual propertyCreations of the mind that a company can legally own, such as code, inventions, designs, brand names and content, protected by patents, trademarks and copyright.
  • acquisitionThe purchase of one company by another, through buying most or all of its shares or its business. It is the most common exit for startups.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Fundraising & Investors

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