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CHECKLIST · 29 ITEMS · 20 MIN
VC Due Diligence Preparation Checklist
A 29-item readiness checklist for an early-stage tech startup operating in Turkey, preparing for a VC investment. Covers legal, financial, and commercial dimensions — grounded in Turkish law and case precedents.
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VIRCON LEGAL · FOUNDER ACADEMY
VC Due Diligence Preparation Checklist
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SECTION 1 · 8 ITEMS
Corporate Structure & IP
The legal skeleton of the company and the startup's most valuable asset — intellectual property. This is the first area DD examines and the most common source of deal-breakers.
Current Trade Registry Gazette extract and latest status from the MERSİS portal are ready. The notarized articles of association and any amendments are on file.
Shareholder register, capital contribution percentages and voting rights documented. Restrictive provisions on share transfers (pre-emption rights, etc.) are defined. (Turkish Commercial Code No. 6102)
Board / general manager appointment resolutions and up-to-date signature circulars in place. Authority limits clearly defined.
All developed software/architecture is owned by the company. Developer agreements (freelance + in-house) reviewed and include IP assignment. No company code remains in personal GitHub accounts or former co-founders' hands.
Product/service name and logo registered with the Turkish Patent and Trademark Office. Registration Nice classes match the product — wrong-class registration creates protection gaps. (Court of Cassation 11th Civ. Ch., E.2023/3901 K.2024/6767)
Patent or utility model application filed or registration certificate obtained (if applicable) for any technological innovation.
Open-source software and third-party library license terms (GPL, MIT, Apache, etc.) documented. License impact on the commercial product evaluated — particularly copyleft risk.
Founders' agreement signed between co-founders, including vesting (gradual share earn-in), non-compete and IP assignment to the company.
SECTION 2 · 6 ITEMS
Employment & Commercial Contracts
Employee, contractor, and customer contracts are the primary source from which an investor assesses "operational risk."
Written employment contract for every employee. For R&D staff in particular, IP provisions are explicit — IP created in the course of employment expressly belongs to the company.
External service agreements structure ownership and transfer of work product to the company. No freelancers working without a written contract. (Court of Cassation 13th Civ. Ch., E.2007/6416 K.2007/9246)
Terms of Service offered to users and Statement of Work agreements with key customers are ready. Limited liability, data responsibility, and termination clauses reviewed.
Cloud (AWS, GCP, Azure), domain, API integrations, and CDN agreements are on file. Auto-renewal, price-increase, and data-location clauses verified.
NDAs signed with potential investors, partners, and major customers are archived. No sensitive information shared without an NDA in place.
Change-of-control clauses in all major customer/supplier contracts identified — contracts that may auto-terminate or require re-approval at the investment round are listed.
SECTION 3 · 8 ITEMS
Compliance & Financial Position
KVKK, sector licensing, taxes, social security, and financing history. This is where the investor answers "is there anything that will come back to bite us?"
Registered as Data Controller in VERBİS (if thresholds met). Privacy notice, privacy policy, and data retention / inventory policies in place. Required undertakings signed with employees and processors.
Required sector-specific licenses or approvals (BDDK/TCMB for payments, fintech, health-tech regulatory approvals, etc.) obtained.
No ongoing litigation, arbitration, administrative investigation, or formal correspondence in which the company is a party. If any exist, they are documented with estimated exposure.
Income statements maintained since inception, balance sheet, last 12 months of cash flow are ready. Revenue model and cash flow projection investor-ready.
Past-period tax certificates and all tax filings (VAT, corporate income tax, etc.) complete and filed. No outstanding tax liability.
Documents proving all employees are properly insured (SGK). No outstanding SGK premium debt.
All seed funding, grants, loans, or convertible notes received are documented. Collateral, repayment terms, and investor rights in those agreements have been reviewed. (Court of Cassation 11th Civ. Ch., E.2025/897 K.2025/4909)
Receivables/payables between the company and shareholders are reconciled and documented. Hidden capital ("örtülü sermaye") risk assessed. (Court of Cassation 11th Civ. Ch., E.2016/3095 K.2016/9803)
SECTION 4 · 7 ITEMS
Product, Market & Team
The commercial narrative: product, market position, and human capital. Clean legal and financial files aren't enough — the investor also wants "why will this grow?"
Market research, user feedback, NPS/retention metrics, and early adoption data are presentable.
Technology stack, architecture documentation, and technical-debt analysis ready. 10x scaling scenarios considered.
The nature, volume, source, and processing legality (KVKK compliance) of collected data is documented. The most critical file for companies that claim "our product runs on data."
Main competitors and the startup's unique selling points clearly described. A 60-second answer to "why us?" is ready.
Revenue is not disproportionately tied to one customer, nor is a critical feature tied to a single supplier. Single customer at 40%+ is a red flag for investors.
Founding team's complementary skills (technical + commercial + operational) are balanced. Tech team experience is documented through presentable CVs.
Limited loss of key employees in the last 12 months. Employee satisfaction is tracked (NPS / 1:1s). At the early stage, team dynamics are a meaningful risk factor.
Decision Matrix — Are We DD-Ready?
How your checked items distribute shows how ready you are for the due diligence process:
- Section 1 6+/8 checked: Corporate structure and IP are solid. You'll pass the most critical part of DD.
- Section 2 5+/6 checked: Contracts are in order. Customer and employee relationships are documented.
- Section 3 6+/8 checked: Compliance and financials are DD-ready. No surprises on KVKK or tax.
- Section 4 5+/7 checked: The commercial story is strong. Investor finds a clear answer to "why invest?"
- All four sections above threshold: Open the data room — you're presentable to investors over the next 3-4 weeks.
- Section 1 weak: Finish corporate structure and IP assignments first. DD hits hardest here.
- Section 2 incomplete: Run a contract-signing round — unwritten relationships surface in DD.
- Section 3 weak: KVKK compliance + financial audit before anything else. Without these, DD stretches 4-8 weeks.
- Section 4 weak: Even with clean legals, the investor story is thin — revisit the pitch.
Legal notice. This document is for informational purposes only and does not constitute legal advice. The Court of Cassation rulings and statutes referenced are general references; applying them to your specific situation requires evaluation by a lawyer. For a company-specific assessment, contact Vircon Legal: [email protected]
Detailed version
If you haven't read "VC Due Diligence: A Founder's Pre-Investment Preparation Checklist" — start there.
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