Australian Investor Due Diligence Checklist: Cap Table, ESOP, R&D and IP

TL;DR

• Reconcile the cap table and ESOP before investors begin institutional diligence.
• Keep R&D evidence and claims support organized if the company relies on the R&D Tax Incentive.
• Confirm founder, employee and contractor IP ownership.
• Separate sensitive employee and customer information from general investor materials.

What Australian investors commonly need to verify

The exact diligence scope varies, but Australian startups should expect serious investors to test whether ownership, equity incentives, IP, financial records and any material government-program claims match the fundraising story.

Practical workflow

1. Reconcile ownership

Match issued shares, convertible instruments and option grants to the legal record.

2. Review ESOP records

Confirm plan rules, grants, vesting and approvals.

3. Organize R&D evidence

Keep project, expenditure and claim support aligned with finance records where relevant.

4. Confirm IP

Check founder, employee and contractor assignments.

5. Prepare financials

Ensure historical numbers, management reporting and the model reconcile.

6. Open legal diligence

Add corporate, employment, material contract and compliance records as needed.

What to prepare

• Fully diluted cap table.
• ESOP plan and grant register.
• R&D project and expenditure support.
• Financial statements and model.
• IP assignments.
• Corporate and material contract records.

Related SendNow resource: fundraising data room checklist.

Common mistakes

• Treating the cap table as a spreadsheet separate from legal records.
• Leaving old or unsigned option grants unresolved.
• Making unsupported R&D assumptions in the model.
• Discovering contractor IP gaps during investor diligence.

External reference: Australian Taxation Office R&D Tax Incentive. This article is educational and not legal, tax or financial advice.

See the VDR and Microsite workflow

Frequently asked questions

Do all investors review R&D records?

Not always, but material R&D claims or assumptions can become part of financial and diligence review.

Why does ESOP matter in fundraising?

Investors need to understand fully diluted ownership, available pool and historical grants.

What should be fixed before diligence starts?

Ownership mismatches, incomplete grants, unclear IP and inconsistent financial records should be addressed early.

Build a cleaner investor workflow

Use SendNow Microsites to keep deeper investor access organized and auditable.