India startup due diligence: the layer generic checklists miss
The seven diligence pillars are the same everywhere. What changes for an India-registered company is the evidence available to verify them — a public filing trail, a monthly tax record, instrument structures that do not appear in a US template, and sector permissions that often sit in someone else's name.
In short
For an India-registered company, six areas carry country-specific evidence: the corporate filing record, the cap table and its instruments, GST-to-revenue reconciliation, statutory dues and employment terms, sector licensing, and reference practice. Each one can be checked against a document rather than a founder's description, and each is a common source of late surprises.
01
Entity, filings and corporate record
An India-registered private company leaves a public paper trail that a deck never mentions. Most early inconsistencies surface here rather than in the financials.
What to check
Company identification number, incorporation date and registered office against the deck's claims
Annual return and financial statement filings — whether they are filed, and how late
Charges registered against the company, including lender security nobody mentioned
Director list and any disqualifications or overlapping directorships
The ask
Ask for the corporate secretarial file and the last two years of filed statements, not the founder's summary of them.
02
Cap table and instruments
Indian rounds mix domestic and foreign instruments, and the cap table in the deck is frequently the founder's simplified view of a more complicated reality.
What to check
Share certificates and the register of members reconciled to the stated cap table
Convertible instruments and their conversion mechanics, including any that convert ahead of this round
ESOP pool — approved size, granted, vested, and whether it sits before or after this round
Foreign investment reporting where offshore money has already come in
The ask
Ask for the register of members and every instrument document, then rebuild the post-money table yourself.
03
Revenue, GST and collections
Indian companies produce a monthly indirect-tax trail that is a useful independent read on revenue, and it rarely matches the deck exactly.
What to check
Monthly GST returns reconciled against reported revenue for the same months
Invoiced revenue against bank credits, not against the founder's revenue chart
Receivable ageing — long collection cycles are common and change the runway maths
Related-party revenue and its share of the total
The ask
Ask for twelve months of GST filings and the matching bank statements, and reconcile them line by line.
04
Statutory dues and employment
Unpaid statutory dues are quiet, cheap to check, and expensive after closing. They also indicate how the company behaves when cash is tight.
What to check
Provident fund and professional tax remittances against payroll
Tax deducted at source: deducted, deposited, and returns filed
Contractor arrangements that function as employment
IP assignment clauses in employment and contractor agreements
The ask
Ask for payroll registers and remittance challans for the last four quarters.
05
Sector regulation
The regulatory answer for an India-registered company depends on the sector in a way that generic checklists skip entirely.
What to check
Lending, payments or insurance activity conducted through a partner licence rather than the company's own
Data handling obligations under India's personal data regime and the consent record behind them
Import, manufacturing or food and drug approvals where physical product is involved
Foreign ownership limits that apply to the sector before the round is structured
The ask
Ask which licences the business operates under and whose name they are in — partner-held permissions are a dependency, not an asset.
06
References and customer verification
Reference calls in a tightly networked ecosystem are shaped by relationships. The signal comes from who is not on the list.
What to check
References outside the founder's chosen list, including a churned customer
Purchase orders or contracts behind named enterprise logos
Whether a pilot with a large customer has a paying successor contract
Prior investors' view of the last round's milestones
The ask
Ask for two references the founder has not prepared, and one customer that stopped paying.
What this does not capture
This page covers the evidence layer, not the legal opinion. Structuring, tax treatment and regulatory interpretation are questions for Indian counsel and a tax adviser on the specific facts of the deal. Rules and thresholds also change; treat every item here as a prompt to check the current position rather than a statement of it. Nothing on this page is legal, tax or investment advice.
