What Investors Look for in HR During Startup Due Diligence

HR gaps are one of the most common deal-killers in early-stage funding rounds. Here is exactly what investors and their lawyers check, and how to prepare before they ask.

Most founders are surprised to discover that HR documentation is a standard part of investor due diligence. Gaps in worker classification, offer letters, handbook policies, and equity documentation can delay or derail a funding round. Here is what gets scrutinized and how to get ahead of it.

Why investors care about HR

Worker classification

Offer letters and employment agreements

Employee handbook and core policies

Payroll compliance

What to do before you start fundraising