This FAQ gives source-checked answers to common due diligence questions for startup founders in October 2026. Due diligence is the document and compliance check investors, buyers, and lenders run before they fund or acquire your company. Use it to close gaps before they slow a round, acquisition, or loan. Each answer below covers what to file, what to verify, and when to get help.
Table of Contents
- How do I file a Regulation D raise?
- Can I publicly advertise my round?
- What founder stock and IP papers will investors check?
- Buying or selling with an SBA loan this fall?
- Does my app need child-privacy controls now?
How do I file a Regulation D raise?
Founders raising under Rule 504, 506(b), or 506(c) must file SEC Form D within 15 calendar days after the first sale. The SEC says filing is made via EDGAR at no fee, and late filing alone does not destroy the exemption but creates diligence and enforcement risk, according to the SEC's exempt offerings guide.
Put the deadline on your closing checklist. Name who files, confirm EDGAR access before first money arrives, and keep proof of filing for your data room.
Can I publicly advertise my round?
It depends on which Rule 506 path you choose. Rule 506(c) allows broad solicitation and advertising only if all buyers are accredited investors and you take reasonable steps to verify status. The SEC explains that one non-accredited buyer can jeopardize the whole exemption, according to the SEC's Rule 506(c) guide.
Rule 506(b) is the quiet alternative. It allows an unlimited raise from unlimited accredited investors without general solicitation or advertising. Choose 506(b) for angel and seed rounds you market through personal contacts.
What founder stock and IP papers will investors check?
Investors check your Section 83(b) elections for restricted founder stock. The DLA Piper Accelerate founder guide states you must file within 30 days after grant or purchase to be taxed on grant-date value. A late filing voids the election, so income is taxed as vesting lapses.
They also check invention assignments for each patent and application. Harness IP notes you need a signed inventor-to-company assignment and USPTO recordation. An unrecorded assignment is void against a later purchaser for value without notice unless recorded within three months or before purchase.
- File 83(b) by certified mail and save the IRS receipt
- Collect signed IP assignments from every founder and contractor
- Record assignments promptly and link them in your cap table
Buying or selling with an SBA loan this fall?
SBA SOP 50 10 8.1 for 7(a) and CDC/504 loans took effect October 1, 2026. It resets acquisition and ownership-change underwriting that founders face when exiting or buying through SBA loans.
For larger deals, start diligence early. According to AAFCPAs, certain 7(a) change-of-ownership and expansion deals priced at 3 million dollars or more now require an independent Quality of Earnings report for the lender, adding cost and time, as described in AAFCPAs' September analysis.
- Confirm if your deal type and price trigger the report
- Budget for the vendor and lender review time
- Prepare three years of clean financials before you apply
Does my app need child-privacy controls now?
Yes, if you handle children's data. FTC COPPA Rule amendments were published April 22, 2025, with compliance required by April 22, 2026.
That makes safeguards, retention limits, and notices a current diligence item for edtech and consumer apps, according to the Privacy + Security Academy's FTC 2026 enforcement summary. Map what child data you collect, why you keep it, and when you delete it. Update your privacy notice and vendor contracts to match your actual retention practice.