Pre-Investment Due Diligence for Startup Angels

Pre-investment due diligence for startup angels in Singapore

Pre investment due diligence startup work is the set of checks an angel runs before signing a term sheet or wiring a first cheque. In Singapore that usually means confirming the company exists and is live, understanding who really owns it, testing whether the founders can execute, and spotting dealbreakers early while the ticket is still small.

You do not need a law firm to start. Most small seed tickets can be screened in a weekend with public registers, a cap table walkthrough, customer calls, and a clear-eyed read of the SAFE or convertible note. The goal is not perfection. The goal is to avoid backing a dead entity, a disputed cap table, or a team that cannot ship.

Scale helps explain why registry checks matter. The ACRA register snapshot on data.gov.sg recently showed 624271 live companies against 2124508 total entities and 523699 struck-off records in the October 2026 cut, which tells angels that name and status alone prove very little and that live status, officers, and filings must be checked case by case. Use ACRA as the authoritative source for live status and officers, and treat all other directories as leads only.

• Confirm the Singapore entity, UEN, live status, officers, and registered address before you discuss valuation.
• Reconcile the pitch-deck cap table to ACRA share capital and to every SAFE, convertible note, and option promise.
• Test commercial traction with customer and ex-employee calls, not only founder slides and logos.
• Decide in advance what would make you walk away, then write it down before the founders charm you out of it.

Cap table questions founders can answer before you wire money

The cap table is where most small angel tickets get hurt. Founders often show a clean fully diluted chart while forgetting expired SAFEs, advisor promises, unissued employee pools, or a co-founder who left with paper shares. Your job is to turn the pretty chart into a share-by-share story that ties to ACRA and to signed documents.

Ask for the cap table in shares, not only percentages, with pre-money and post-money columns for your exact cheque. A fictional example, labeled fictional: two founders each hold 400000 ordinary shares, an advisor holds a promise for 40000 shares that has not been allotted, and two SAFEs convert at a twenty percent discount with a valuation cap. On paper the founders each own fifty percent, but after the advisor allotment and SAFE conversion your ten percent target may be closer to seven percent. Percentages without share counts hide that dilution.

Also ask who can block your exit. In Singapore private limited companies, reserved matters, drag-along rights, pro-rata rights, and liquidation preferences usually sit in the subscription agreement and shareholders agreement, not on the ACRA business profile. If the founders cannot produce signed copies, treat every valuation promise as draft.

1. How many ordinary shares are issued today, to whom, at what price, and what is the ACRA paid-up capital figure they tie to.
2. Every SAFE, convertible note, and loan that converts into equity, with cap, discount, maturity, and what happens if the next round never comes.
3. Employee and advisor pools, split into granted versus promised versus merely discussed, with vesting and expiry terms.
4. Departed founders and early helpers, showing vested shares kept, unvested shares clawed back, and any IP assignment still missing.
5. Control terms that travel with your money, including board seats, vetoes, pro-rata rights, anti-dilution, and drag-along thresholds.
6. How your exact ticket converts in the next priced round, shown in shares and percentage ownership, not only post-money headline valuation.

If the founders get defensive about these questions, that is data. Strong teams keep a single cap table model, share the underlying SAFEs quickly, and explain dilution without hand-waving. For a side-by-side on what public records can and cannot prove, see check a company is legitimate in Singapore and consider a pre-deal check when the paper trail does not reconcile.

ACRA and public-register checks you can run yourself

ACRA BizFile is the starting point for every Singapore startup check. Search by exact company name or UEN, confirm the entity type is a live private limited company, then buy or review the business profile for officers, shareholders, share capital, registered address, and filing history. Free directory mirrors can point you to a UEN, but only ACRA confirms whether that UEN is live, in strike-off, or already struck off.

Read the profile like a buyer, not a fan. Look for recent mass resignations of directors, a corporate secretary churning every few months, a residential or virtual address paired with enterprise revenue claims, tiny paid-up capital against large claimed raises, and annual filings that stop the year traction supposedly took off. None of these alone kills a deal, but two or three together justify a pause and a direct question to the founders.

Context from the wider register keeps you honest. With 624271 live companies inside 2124508 total entities in the ACRA register snapshot via data.gov.sg monthly files, plus 523699 struck-off records in the October 2026 cut, Singapore churns entities constantly. A live listing is therefore a minimum filter, not a quality mark. Cross-check domain ownership, LinkedIn employment history, customer contracts, and bank statements before you treat registry presence as traction.

• UEN and name match, entity type, live status, incorporation date, and registered office against the pitch deck and term sheet.
• Current directors and shareholders, appointment and cessation dates, and any corporate shareholder that hides the ultimate owner.
• Share capital and allotment history, compared line by line to the founders cap table model and SAFE conversion math.
• Compliance signals such as overdue annual returns, frequent officer changes, charges or pledges, and any strike-off or winding-up notation.
• Name-history and sister entities with similar names that could hold the IP, revenue contracts, or liabilities you thought were in this company.

When the download is confusing, order an ACRA files review rather than guessing. A short expert read of officers, charges, and filing gaps usually costs far less than a lawyer letter after the money has moved, and current options are listed on pricing.

Reference calls that surface real risk

Founder calls sell the vision. Reference calls reveal whether anyone pays, stays, and reorders. For a pre-seed or seed ticket, run four to six calls yourself: two paying users, one churned user, one ex-employee or contractor, and one peer founder or supplier who has seen the team under stress. Thirty minutes each beats another pitch replay.

Keep the calls short and specific. Ask what job the product replaced, what they paid, what broke, how fast support responded, and what would make them cancel. With ex-team members, ask about shipping cadence, cash discipline, and how disputes were handled. You are listening for concrete detail. Vague praise without dates, amounts, or incident stories is a yellow flag.

A fictional example, labeled fictional: an angel hears that a food-delivery analytics startup has twelve paying hawker chains. On calls, two chains say they paid for a pilot but did not renew, one says the founder personally compiled reports each Sunday because the dashboard was down, and an ex-developer says the CTO left three months earlier. None of that appears on ACRA, yet it changes the valuation and the vesting protection you should demand. Document every call with name, role, date, and quotes so your investment note reflects evidence rather than memory.

• Ask customers for contract value, start date, renewal date, decision maker, and the one feature they would miss if the startup shut down tomorrow.
• Ask churned users what promise failed, whether refunds or disputes followed, and what competitor replaced the startup.
• Ask ex-employees about runway honesty, salary timeliness, founder conflict, and whether IP assignments and handover notes were completed.
• Ask suppliers about payment behavior, order frequency, and whether the startup is still a going concern in their eyes.
• Close every call with who else should you speak to, then actually call one name the founders did not suggest.

When to stop doing it yourself and pay for the pack

Do-it-yourself diligence works until the cheque grows, the structure gets complex, or the story stops reconciling. As a rule of thumb, founders can self-run registry pulls, cap table math, and reference calls for simple pre-seed tickets on a standard SAFE. Bring in paid help when there are multiple entities, cross-border founders, heavy SAFE stacking, missing shareholder papers, or any hint of disputes, charges, or related-party loans.

Think of paid diligence as buying a clean no-go as much as a green light. A compact pack that rebuilds the cap table, reads the ACRA filings, flags contract risks, and summarizes reference-call themes often saves angels from topping up a broken round. If the founders resist independent checks, treat that resistance as the answer and pause.

A practical trigger list helps. If your ticket exceeds what you can lose without pain, if the round includes more than three converting instruments, or if any director, debt, or IP owner sits outside Singapore, get an independent read before you sign. Start with a quick check for one burning question or a pre-deal check for a full pay, sign, or meet verdict.

• Pay when the cap table and ACRA share capital do not reconcile after one founder attempt to fix them.
• Pay when the raise uses stacked SAFEs, side letters, or advisor promises that materially change your ownership.
• Pay when reference calls contradict deck logos, revenue claims, or team bios.
• Pay when money moves offshore, IP sits in another entity, or a director will not show identification for verification.

Frequently asked questions

These answers are general information for Singapore angels and founders, not legal or investment advice. Use them to scope your own checks and to brief your lawyer or accountant with better questions.

What documents should a Singapore startup share before I invest

At minimum, ask for the ACRA business profile, the cap table in shares with all SAFEs and notes, signed SAFE or subscription documents, the latest management accounts and bank statement, key customer contracts, and founder employment and IP assignment letters. If any core document is missing or unsigned, price that risk into the valuation or delay the wire until it is fixed.

How do you verify a startup is really live in Singapore

Search the exact UEN on ACRA BizFile, confirm live status and entity type, then match directors, shareholders, and registered address to the deck and term sheet. Remember that the data.gov.sg monthly snapshot recently counted 624271 live companies within 2124508 total entities, so live status is only a starting filter. Check filing currency, officer stability, and whether revenue contracts sit in the same entity you are funding.

What cap table red flags matter most at pre-seed

Watch for percentages without share counts, large advisor slices with no vesting, departed co-founders still holding big stakes, SAFEs that convert below your entry price, and an employee pool that is quoted as available but already promised. Ask the founders to show your ownership after every promise converts, not only today.

Should angels call customers directly

Yes, with founder permission and a short script. Two current payers, one churned user, and one ex-team member will teach you more than ten advisor chats. Record amounts, dates, and renewal intent, and always add one off-list call the founders did not arrange.

When does paid diligence pay for itself

When the cheque is large for you, when the structure spans entities or borders, or when papers and stories do not match. A focused pre-deal check or ACRA files review is far cheaper than litigating a bad subscription, and you can compare options on pricing before you commit.

• Start free with BizFile, cap table math, and reference calls for simple local SAFEs.
• Escalate to a paid pack when dilution, disputes, debt, or offshore entities appear.
• Keep every UEN, share count, and call note in one memo so later top-ups reuse the work.