# What is Due Diligence? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Funding  
> **Canonical Citation:** [https://spidits.com/startup-glossary/due-diligence](https://spidits.com/startup-glossary/due-diligence)

## Definition
Due Diligence is the comprehensive investigation and audit of a startup conducted by investors before finalizing an investment.

## Architectural Mechanics & Deep Dive
Due Diligence is the comprehensive investigation and audit of a startup conducted by investors before finalizing an investment. The process covers financial audits (revenue verification, tax compliance), legal audits (intellectual property ownership, employment contracts), technical audits (code quality, architecture scalability), and reference checks on the founders to verify claims and mitigate risk.

## Industry Applications & Real-World Use Cases
Risk assessment and legal deal closure audits

## Frequently Asked Questions

### What do investors review during due diligence?
Financial statements, tax filings, legal structure, intellectual property ownership, cap table, customer reviews, and code architecture.

### How long does due diligence typically take?
For institutional priced rounds (Series A+), it usually takes anywhere from 2 to 6 weeks depending on startup preparation.

## Related Terminology
- [term-sheet](https://spidits.com/startup-glossary/term-sheet)
- [cap-table](https://spidits.com/startup-glossary/cap-table)
- [nda](https://spidits.com/startup-glossary/nda)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*