Introduction
A funding round is a decisive step for any Swiss corporation. In addition to the pitch deck and business plan, investors also examine the legal foundation of the company – the Legal Due Diligence. Business Angels and venture capital firms attach great importance to clean and reliable documentation. In this article, you will learn what a Legal Due Diligence is, why it is so important, and how Konsento can help you prepare for it effectively.
What is a Legal Due Diligence?
A Legal Due Diligence is the legal review of a company by investors or potential buyers. The goal is to ensure that all documents are complete, accurate, and legally compliant. From a corporate governance perspective, this includes in particular the share register, the transaction history, subscription forms and transfers, shareholder agreements, minutes of board and general meetings, employee participation programs, and the articles of association.
In short: investors want assurance that the company is legally well organized and that all ownership relationships are clearly documented.
Why is thorough preparation essential for entrepreneurs and board members?
A Legal Due Diligence is required by investors. For entrepreneurs, founders, and board members of Swiss corporations, this means that they are obliged to enable the review – by providing all relevant documents fully and correctly. Careful preparation is therefore essential.
From the investors’ perspective, incomplete documentation increases the risk that legal uncertainties, gaps, or inconsistencies delay or even jeopardize the deal. For the company, this means: good preparation directly determines its investability.
Three key reasons:
- Avoiding dealbreakers: Missing subscription forms, unclear ownership structures, or incomplete board and shareholder meeting minutes are warning signs for investors. If such gaps are uncovered, trust is undermined and lengthy corrections are often required.
- Sending the right signal: A complete share register, up-to-date articles of association, and well-prepared contracts demonstrate professionalism. This strengthens the credibility of the management team and signals that the company is ready for a funding round.
- Efficiency and negotiation power: A well-prepared data room accelerates the review process considerably. Instead of reacting to missing documents, entrepreneurs, board members, and CFOs can steer discussions with investors toward strategic issues – with more time, confidence, and stronger negotiating positions.
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What do investors review in Switzerland?
Business Angel clubs such as SICTIC, Aare Ventures, or Business Angels Switzerland apply clear expectations. After a pitch, if interest is shown, a Legal Due Diligence almost always follows. This review focuses in particular on:
- The share register and ownership structures
- Subscription forms and transfer agreements for all past transactions
- Existing shareholder agreements
- Minutes of board and general meetings
- Articles of association, including authorized or conditional capital for upcoming funding rounds
- Employee participation schemes such as ESOPs or phantom stock
In addition, the guidelines of SECA (Swiss Private Equity & Corporate Finance Association) are relevant. They apply not only to startups but also to established SMEs, and stipulate that a comprehensive Legal Due Diligence must always be carried out before an investment – as part of professional investment practice.
For SMEs, Business Angel clubs are not the main reference point, but investors are typically represented by law firms, which apply the same standards to corporate documents, contracts, and governance. This means that the due diligence requirements effectively apply equally to both young startups and established companies.
In short: a Legal Due Diligence covers all aspects that ensure the stability and growth capacity of a company.
How Konsento supports you
Konsento is the digital solution that allows companies in Switzerland to prepare effectively for their Legal Due Diligence. The platform offers:
- A digital share register with transaction history
- Upload and centralized management of all relevant documents (subscription forms, transfers, board/AG minutes)
- Checklist-based preparation according to Investor Readiness standards
- Early identification of documentation gaps and concrete recommendations
- The ability to easily create or sign missing documents (transfers, board/AG minutes, statutory amendments, etc.)
- An Investment Readiness Report from a legal and governance perspective, ready to present to Business Angels or VCs
Thus, Konsento becomes the technical foundation enabling entrepreneurs, founders, and board members to prepare efficiently for a Legal Due Diligence and ensure they are always ready for the next funding round.
Conclusion
A Legal Due Diligence is not optional – it is a mandatory prerequisite for successful funding rounds in Switzerland. Business Angels and investors expect complete and reliable documentation. With Konsento, you can not only organize your documents systematically but also identify and close gaps – before they become a problem.
Ready for your next funding round? Start now for free at app.konsento.ch and get prepared for your legal due diligence.