The short answer
Startup due diligence from public records means confirming the legal entity, checking the founders, screening the company and its people for sanctions and PEP status, reading litigation and enforcement by the subject’s role, verifying funding history (in the US, through SEC Form D filings), mapping ownership where it is published, and weighing traction signals such as hiring and web activity. Do it in that order: identity and people problems end a deal fastest. Then take what you found into the founder conversation.
At a glance
- Time
- Minutes per company with automation; hours by hand
- Order
- Identity → people → screening → litigation → funding → traction
- Key US sources
- SEC EDGAR, Form D, CourtListener, OFAC
- Key UK sources
- Companies House, the Gazette, disqualified directors
- Output
- A short cited memo and a list of questions for the founders
- Not covered
- Data room, references, product and technical review
Startup due diligence, step by step
- 1
Resolve the legal entity
Find the exact registered company — name, number, jurisdiction, status and registered address — and any parent. Use identifiers (company number, LEI, SEC CIK) rather than names, so every later check is about the same entity.
- 2
Check the founders
List the founders and officers from the register and filings. Look at their other companies and how those ended, any director disqualifications, and whether they appear in litigation or the press.
- 3
Screen sanctions and PEP status
Screen the company, its officers and its owners against the OFAC, EU, UN and UK lists and a PEP screen. Treat name-only hits as leads to investigate, not conclusions.
- 4
Read litigation and enforcement by role
Search court dockets and regulator releases. A startup suing to collect a debt is routine; being a defendant in fraud or securities cases is not. Note the status of each case.
- 5
Verify the funding history
In the US, look for SEC Form D filings: dates, amounts sold and related persons. Compare them with what the deck says.
- 6
Map ownership and control
Use what the jurisdiction publishes — UK persons with significant control, GLEIF parent links, 13D/13G for listed companies. Note where nothing is published.
- 7
Weigh traction signals
Open roles on public job boards, website history and rank, tech stack, GitHub activity and app listings. Trends matter more than snapshots.
Which red flags should stop or slow a deal?
- A confirmed sanctions match on the company, an officer or an owner.
- A founder disqualified as a director, or linked to several insolvent companies.
- Defendant in fraud, securities or consumer-protection actions.
- Funding claims that cannot be reconciled with filings.
- A company that is not the entity in the term sheet, or is dissolved or struck off.
One red flag is a reason to ask, not automatically to walk away — the context in the source record matters.
How much of this can be automated?
All of the public-record gathering can. MarketPrior resolves the entity, runs every check above in parallel and returns a risk × upside verdict with each finding cited — in internal benchmark runs the median was about 25 seconds per company. The verdict is free for any company, so you can screen before you decide what deserves a full report.
What cannot be automated is judgement: deciding which findings matter for this deal, and talking to the founders about them.
What should you ask the founders afterwards?
- Explain any litigation where the company or a founder is a defendant.
- Walk through previous companies, especially ones that were dissolved or insolvent.
- Reconcile the funding history in the deck with filings.
- Confirm the ownership structure where the public record is thin.