Biotech · Growth Stage Due Diligence

Biotech Growth Due Diligence Checklist

The complete Growth due diligence checklist for Biotech startups. Prepare your data room, anticipate every investor request, and close your round faster.

All Checklists

8–16 weeks

Typical DD Timeline

DD Categories Covered

50+

Checklist Items Total

Biotech Regulatory DD Context

Biotech DD includes deep scientific review. Investors will engage independent scientific advisors to review your pre-clinical and clinical data. Have your complete data package ready in a secure data room.

Data Room Essentials for Growth

Documents to have ready before DD begins

3–5 years PCAOB-audited financials
Quality of Earnings report
All material contracts with change-of-control provisions flagged
Complete regulatory compliance documentation by jurisdiction
D&O insurance with adequate limits
Full cap table through all exit scenarios
Board committee charters and governance policies

LEGALLegal Due Diligence

Pre-IPO or strategic acquisition-grade legal review. Includes securities law compliance, international regulatory analysis, and potential anti-trust review for strategic transactions.

General Legal Items

Certificate of Incorporation and all amendments
Bylaws and any shareholder agreements
Cap table with fully diluted ownership by class
All convertible instruments (SAFEs, notes, warrants)
Option pool documentation and all grants
Founder IP assignment agreements
Co-founder agreements and vesting schedules
Material third-party agreements

Biotech-Specific Legal Items

Patent portfolio (granted and pending) with expiration dates
Freedom-to-operate (FTO) opinion from IP counsel
Licensing agreements (in-licensed and out-licensed IP)
Material transfer agreements (MTAs)
Clinical trial agreements and IRB approvals

FINANCIALFinancial Due Diligence

PCAOB-audited financials. Quality of earnings (QoE) report from Big 4. Full revenue recognition analysis (ASC 606). Detailed working capital and free cash flow analysis.

General Financial Items

Financial statements (P&L, balance sheet, cash flow)
Bank statements (12+ months)
Accounts receivable aging report
Accounts payable aging report
Payroll records and headcount history
Revenue recognition policy documentation
Tax returns and any outstanding tax obligations
Insurance policies (D&O, E&O, general liability)

Biotech-Specific Financial Items

Milestone-based funding schedule and triggers
R&D burn by program and project
Government grant and SBIR/STTR funding history
Collaboration revenue recognition methodology
Manufacturing cost of goods at scale (COGS projection)

PRODUCTProduct and Technical Due Diligence

Clinical trial protocol and amendment history
IND application and FDA correspondence
Pre-clinical data package completeness
CMO qualification and manufacturing readiness
Clinical hold risk assessment

MARKETMarket Due Diligence

Comparable drug approval timelines and outcomes
Reimbursement landscape analysis (payer coverage by indication)
Key opinion leader (KOL) relationships and advisory board credentials
Competitive landscape by indication and mechanism of action

TEAMTeam Due Diligence

Independent director background review. Compensation benchmarking study. Succession planning documentation review.

LinkedIn profiles for all founders and officers
Employment agreements for key personnel
Equity grant history and vesting schedules
Any prior employer IP invention disclosure forms
Non-compete and non-solicitation agreements
Professional reference contacts (3+ per founder)
Advisory board agreements and equity grants
Organizational chart as of current date

Frequently Asked Questions

How long does Growth due diligence typically take for Biotech startups?

Biotech Growth due diligence typically takes 8–16 weeks. Pre-IPO or strategic acquisition-grade legal review. Includes securities law compliance, international regulatory analysis, and potential anti-trust review for strategic transactions. Having a complete data room ready before DD kicks off can reduce this timeline by 30–50%.

What Biotech-specific items do investors review during Growth DD?

For Biotech at the Growth stage, investors focus heavily on: Patent portfolio (granted and pending) with expiration dates, Freedom-to-operate (FTO) opinion from IP counsel, and Milestone-based funding schedule and triggers, R&D burn by program and project. Biotech DD includes deep scientific review. Investors will engage independent scientific advisors to review your pre-clinical and clinical data. Have your complete data package ready in a secure data room.

What should I put in my data room?

Your Growth data room should include: 3–5 years PCAOB-audited financials; Quality of Earnings report; All material contracts with change-of-control provisions flagged; Complete regulatory compliance documentation by jurisdiction; D&O insurance with adequate limits; Full cap table through all exit scenarios; Board committee charters and governance policies. Use a structured folder system that mirrors investor expectations — most institutional investors use a standard folder taxonomy.

What are the most common due diligence deal-killers?

The five most common DD deal-killers are: (1) undisclosed founder litigation or criminal history, (2) IP ownership gaps — particularly for university-origin technology, (3) customer contract terms that prevent assignment on change of control, (4) cap table math errors or undocumented equity grants, and (5) financial restatements required after revenue recognition review.

What team due diligence should I expect at the Growth stage?

Independent director background review. Compensation benchmarking study. Succession planning documentation review.

Download the Full Checklist

Get the Biotech Growth due diligence checklist as a Google Sheets or Notion template. Track completion status for every item in your data room.

Includes data room folder template, investor question tracker, and reference FAQ guide

Other Biotech Stages

Pre-Seed Seed Series A Series B