Built by Gergana Stoichkova | VC Compass in collaboration with Bilyana Dimitrova, Head of Investments & M&A at DSP (Dimitrova, Staykova & Partners)
Once you sign a term sheet, your chances of closing are above 90%. But between the signature and the money sits due diligence, and on almost every deal that includes legal DD, run by a law firm the investor hires.
Your goal with it: be as fast as possible in providing documents, so the delay does not stay with you. The more prepared you are upfront, the faster the DD, the faster you'll get your money.
Work through this before you need it, and you'll compress weeks out of your round. Everything you build here also gets reused in every round after this one.
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DSP has run close to 200 due diligences over 10+ years, and they've done it from every side of the table: for funds, for angels, and for the companies going through it.
The content comes from a conversation with Bilyana Dimitrova, who heads their investments and M&A practice. (check the whole interview)
So everything below is what a law firm will actually ask you for, should you enter a legal due dilligence.
I have personally worked with Bilyana and team on a number of deals. :)
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This is where every legal DD starts. It answers one question: does this company legally exist the way you say it does, and who owns it?
⚠️ The most common omission: a company registered with one founder, when in reality there are three. The other two were working "on a handshake" and nothing was ever signed. DD finds this, and the deal now waits while you complete a corporate registration. Not a dealbreaker, but this single issue can add weeks to the process.