VC & PE Glossary
What Is Disclosure Schedule?
Updated
Definition
A disclosure schedule is an exhibit to a purchase or financing agreement listing exceptions to the seller's representations — known issues, contracts, litigation, and cap table details disclosed upfront.
Useful for: Founders, Investors
A disclosure schedule accompanies definitive agreements — stock purchase, merger, or major financing — detailing exceptions to representations and warranties made by the company or sellers.
How it works
The main agreement states broad reps: “No undisclosed litigation,” “IP owned free of liens,” “Material contracts listed.” The disclosure schedule itemizes every exception — lawsuit X, customer contract Y, SAFE Z not in cap table summary.
Schedules mirror categories in the agreement and cross-reference data room documents. Buyers and investors review them line by line during confirmatory diligence.
Incomplete or misleading schedules expose founders to indemnification clawbacks after close — especially in private M&A with holdbacks and escrows.
Venture rounds use lighter disclosure letter practices, but major down rounds or secondary sales may adopt M&A-style schedules.
Counsel drafts schedules from management questionnaires — accuracy depends on founders surfacing issues early, not last-minute memory.
Why it matters
- Founders: Treat schedules as legally binding inventory of warts. If it is not disclosed, you may pay for it post-close.
- Investors: Schedules reveal cap table side letters, change-of-control fees, and customer concentration contracts that affect valuation.
Common mistake
Copy-pasting prior round schedules without updating for new litigation, layoffs, or customer losses. Stale schedules are a leading cause of post-close disputes.
Related ideas
See also data room, cap table, reps and warranties insurance, and indemnification cap.
Related terms
- Cap Table — A cap table (capitalization table) is the record of who owns equity in a company — shares, options, warrants, and convertible instruments — and how ownership percentages change after each financing.
- Data Room — A data room is a secure online repository where companies store due diligence documents — financials, contracts, cap table, IP — for investors or acquirers to review during a deal.
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Common questions
Short answers for founders, LPs, and operators