Inversionistas Ángeles
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Deal Mechanics

Due diligence, before you write the check

Angel diligence is necessarily lighter than a VC fund’s — there is no army of associates and no months-long process. But a few hours of focused checking catches most of the problems that sink early-stage deals.

A practical checklist

  1. The team

    Do the founders have relevant experience or a credible reason to believe they can win in this market? Check references from people who worked with them before — former colleagues, not just people the founder chose to introduce you to.

  2. The market

    Is the problem real and painful enough that customers will pay to solve it? Look for evidence beyond the founder’s own claims: customer interviews, waitlists, existing paying users, or a clearly analogous market that already works elsewhere.

  3. Traction and metrics

    Ask for the real numbers, not the pitch-deck summary — revenue, active users, retention/churn, burn rate and runway. Pre-revenue is normal at pre-seed; vague or unwillingness to share numbers is not.

  4. Legal structure

    Confirm the company is properly incorporated (and, for cross-border deals, understand where — many LATAM startups incorporate in Delaware for international investors). Check for unresolved co-founder equity disputes or IP that was never formally assigned to the company.

  5. The cap table

    Request the fully diluted cap table before committing. See our cap table guide for what to look for — outstanding SAFEs, option pool size, and prior investor terms all affect what you are actually buying.

  6. The terms

    Understand the instrument (SAFE, note, priced equity), the valuation cap or price, and any side letters other investors have negotiated. See our term sheet guide for the clauses that matter most.

Diligence shortcuts that actually work

Talking to two or three of the company’s existing customers, unprompted by the founder, is often more informative than any financial model. Ask how they found the product, what they use instead if it disappeared, and how often they actually use it.

A quick reference call with a founder from the same accelerator batch or investor syndicate — someone with no stake in your decision — frequently surfaces things a pitch deck never will.

Frequently asked questions

How long should angel due diligence take?
Typically a few hours to a couple of weeks, depending on check size and how well you already know the sector. Fast-moving rounds sometimes compress this — which is itself worth noting as a risk factor if it means you cannot complete basic checks.
What if the founder won’t share financials or the cap table?
Treat it as a real signal. Reasonable founders expect this request at almost any check size; repeated deflection is one of the more reliable predictors of problems later.
Should I hire a lawyer to review the documents?
For check sizes where a lawyer’s hourly cost is a meaningful fraction of the investment, most angels skip individual legal review and rely on standardized instruments (SAFEs) instead. For larger checks or priced rounds, an hour of a startup-focused lawyer’s time is inexpensive relative to what it can catch.
What is the single most common reason angel deals go bad?
Team problems — co-founder conflict, a founder who cannot execute past the idea stage, or a team that oversold traction — come up more often in post-mortems than market timing or product issues.