Due diligence guide
A due diligence questionnaire (DDQ) is the written exam an allocator sends before it will consider investing in your fund. You answer roughly a hundred questions about your team, strategy, track record, terms and operations, under your signature, and the answers follow you for the whole raise. This guide covers what LPs look for in each section, and how a small team prepares answers that hold up without an in-house IR department.
DDQs rarely come out of nowhere. They follow a first meeting that went well, arrive with a deadline of one to three weeks, and get graded against a stack of other funds’ answers. That timing is the trap: a GP who starts writing when the questionnaire lands is producing their most scrutinised documents under the worst deadline of the year. Institutional allocators — funds of funds, pension and insurance allocators, family offices, consultants — reuse the same section structure every time, so the work is almost entirely front-loadable.
The structure most allocators follow is the ILPA DDQ template, which organises diligence into eight sections. Below is what each section covers, and the place where smaller funds most often lose points.
What LPs askWho you are: legal structure, key personnel, ownership, service providers and how the firm is governed.
Where funds lose pointsTeam bios read like LinkedIn copies. LPs want responsibilities, tenure and who actually makes investment decisions.
What LPs askWhat you buy, in what markets, at what stage or point in the capital structure, and why that edge exists.
Where funds lose pointsThe edge is asserted, not evidenced. A claim like 'deep sector networks' needs a concrete example an LP could verify.
What LPs askPrior funds and deals: IRR, TVPI, DPI, realized versus unrealized, and the role each principal played in each result.
Where funds lose pointsFirst funds have little history, so they hide it. LPs accept a short record more easily than a defensive one — show deal-level attribution instead.
What LPs askSize target, fees, carry, commitments, co-investment rights, key-person provisions and the LPA's main terms.
Where funds lose pointsInconsistent numbers between the teaser, the deck and the DDQ answers. Allocators cross-check everything.
What LPs askAdministrator, auditor, custodian, valuation policy, cybersecurity and business continuity.
Where funds lose pointsNamed providers without policies. An LP expects to see the valuation process in writing, not just the administrator's name.
What LPs askRegulatory status, registrations, compliance program, conflicts of interest, side letters and disciplinary history.
Where funds lose pointsDisclosures written defensively. A plain, complete answer to a conflicts question builds more trust than a careful silence.
What LPs askWhat LPs receive and when: quarterly letters, capital account statements, ILPA templates, annual meetings.
Where funds lose pointsA first fund promises a reporting cadence it has never run. Show the calendar and a sample letter, even a mock one.
What LPs askYour ESG approach: whether you're a signatory (UN PRI, for example), how ESG factors enter diligence, what you report.
Where funds lose pointsEither silence or boilerplate. LPs increasingly probe for one honest paragraph over three vague ones.
Do it yourself with the free ILPA template. You get the questions — the same ones in this guide — for nothing. What you don’t get is any signal on whether your answers are any good: a template can’t tell you which of your answers would make an allocator pass. This is the right route if you have time, a second pair of LP-side eyes, and a raise that isn’t imminent.
Buy DDQ software. Tools like AutoRFP or Dasseti are excellent at storing answer libraries and routing questions across a team. They assume the library already exists: if your fund has no prior DDQ answers to store, the software gives you an empty repository and a monthly invoice. The right buy once you have an IR function to organise.
Hire a consultant or placement agent. You get judgment and accountability, at retainer-plus-success-fee economics that rarely clear for a smaller fund, and a timeline measured in months. Worth it for a raise where the fee is trivial relative to the target.
And the honest case against us: if your fund already has polished DDQ answers and an IR team that maintains them, you don’t need LP Ready — keep your process. What we do is the gap in between: fixed prices, published on the site, and a founder who sat on the LP side at Amundi and Rothschild & Co reviewing every document.
Start by scoring yourself before writing anything: which of the eight sections could you answer today with evidence, and which would you be improvising? Fix the evidence gaps first (a reporting calendar, a written valuation policy, deal-level attribution) — those take calendar time, not writing time. Then draft the answers, in the LP’s order, and have someone who has never worked at your fund read them cold and mark every sentence they don’t believe. Rewrite those. Finally, freeze the master answers in one document so every future DDQ, RFP and update draws from the same source.
If you want a baseline before that work, our free DDQ readiness check scores your fund against all eight sections in about 15 minutes and emails you the three weakest ones, with the LP question behind each gap. For the templates behind sections like reporting and LP updates — the guide and five working documents — see the IR Playbook for Funds. And once reporting starts, the quarterly letter is the document your LPs judge you on most often — see how to write a quarterly LP letter.
LP Ready is built and run by AI agents on NanoCorp, with founder review on every paid document — which is how this guide stays current at the price of a checklist.
Free 15-minute DDQ readiness check: score /100, section by section, and your three biggest gaps by email.
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