Welcome to the latest edition of “Into the Ring” - my biweekly newsletter on how to successfully plan & execute on your startup fundraise. As a reminder, I’m Jorian Hoover and I’m a Startup Fundraising Sparring Partner. I guide Pre-Seed thru Series A founders through their fundraising process, and you can check out how to work with me here. And a warm welcome to the new subscribers for this edition! If you were forwarded this newsletter, you can subscribe here.

Before diving into today’s essay, I’d love to congratulate my HBS classmates (Cameron, Jason and Bryce) at Nominal on their recently announced $75M Series B from Sequoia. From their website, “Nominal powers mission-critical engineering work across aerospace, energy, automotive, and defense. Automation, analytics, and operations – all in one unified platform.” Amazing to see our Class of 2022 reach for the stars, and excited to follow your journey. (PS - not a deal I was involved in, but just thought this was terrific news, so wanted to share).

Today’s newsletter topic is about the importance of prepping for VC due diligence prior to kicking off your fundraise.

From Term Sheet to Wire: Why Speed Matters

A founder gets a $12M term sheet from a top-tier VC. Celebration ensues. The partner is excited. The founders are pumped. Everyone's ready to move fast.

But the funds? They don’t hit the bank for another three months.

This happens more often than you'd think. And while it's unlikely that post–term sheet due diligence will kill a deal entirely—especially when everyone is incentivized to get it done—it can absolutely slow things down, create frustration, and burn precious time you could have spent building.

Let’s talk about why this happens—and how you can prevent it.

Why This Happens

The short version: due diligence turns into a fire drill.

VC sends over the diligence checklist. It includes 45+ items: IP assignments, employment agreements, customer contracts, board consents, data security policies, state filings, option pool documentation, and more.

The founders assume they can pull it together quickly. But after a few days, reality sets in:

• They’re missing IP agreements from early contractors.

• They’ve misplaced key documents from state agencies.

• Their board resolutions are incomplete.

• Some documents don’t exist. Others have gaps.

Suddenly, the team is spending the next two months chasing down old documents, emailing former employees, calling state agencies, and working with lawyers to backfill holes—all while trying to keep the business running.

This is what I call due diligence hell.

What VCs Want Post-Term Sheet

Once you’ve signed the term sheet, the VC’s legal and ops teams swing into action. They’re looking to validate that:

• Your structure is clean (no unexpected liabilities or surprises)

• Your IP is properly assigned (and the company clearly owns it)

• Your equity is in order (no undocumented promises or side deals)

• And so on.

The partner may love you and the deal, but their legal team’s job is to spot red flags. The smoother your documents, the faster they can give the green light to wire funds.

The inverse is also true: if you’re missing key documents or scrambling to fill gaps, that slows everything down—and makes you look disorganized in the process.

How to Fix It

This is the part that’s easy to overlook: you don’t have to wait for a term sheet to start prepping your diligence.

In fact, the best founders prepare their data room before they even start fundraising.

Here’s how:

1. Ask for a standard diligence checklist

   • Your startup lawyer likely has one. So do most VCs.

   • You can also find examples online. Most checklists are ~80% the same.

2. Start building your data room now

   • Organize everything in folders: Legal, Financial, HR, IP, Product.

   • Use clear naming conventions and logical structure.

3. Fill in the gaps (before you’re on the clock)

   • Missing contractor agreements? Fix them now.

   • Cap table includes undocumented promises? Clean it up now.

   • Need NDAs, employment docs, or option grants? Draft them now.

4. Get help if needed

   • Ask your lawyer or advisors to review and sanity-check your docs.

   • This is tedious work—but it pays off.

Final Thought

The time between signing a term sheet and receiving a wire is a critical stretch. You want it to be measured in weeks, not months.

The easiest way to do that? Start preparing for diligence before you start fundraising.

You’ll impress investors with how buttoned-up you are. You’ll move faster toward close. And you’ll get back to building with capital in hand, not buried in a back-and-forth paper chase.

Deals are rarely lost in post–term sheet diligence. But they can drag—and in startup land, time is money.

Be the founder who’s ready.

👉Want a sparring partner to help you prepare for your fundraising process? I would love to help.

Thanks for stepping Into the Ring 🙏

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👉 I’ve helped 40+ founders raise over $160M. Curious to work with me? You can learn more about what that looks like on my website.

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