Knowledge Base: Warranties & Disclosures in your funding round

The warranty and disclosure stage of your investment round can feel dense—but it’s one of the most critical protections for you as a founder. Done well, it reduces your personal risk and helps build early trust with your investors.

This guide gives you:

• A plain-English understanding of warranties

• Tips on how to approach the disclosure process

• A high-level overview of all warranties you’ll be asked to give

• A link to a detailed blog to dig deeper when you're ready

What Are Warranties and Disclosures?

A warranty is a legal promise from you to your investors that certain key facts about your company are true. These typically cover your accounts, legal compliance, contracts, IP, tax, employees and more.

A disclosure is how you protect yourself. If any warranty isn’t 100% accurate, you need to formally disclose that fact in the disclosure letter. Otherwise, you could be liable if investors later suffer a loss as a result.

Example: You say there are no legal disputes—but you’ve had a letter from a former employee threatening a claim. If you don’t disclose it, you could be personally liable later.

Founders: How to Approach the Warranty and Disclosure Process

This isn’t just box-ticking. It’s one of the most important founder protections in the deal. Here’s how to approach it:

1. Get Familiar with the Warranties Early

You’ll be asked to confirm 21 things about your company. Most are standard, but if anything isn’t 100% accurate—you’ll need to flag it.

2. Use the Disclosure Letter Properly

Disclosures are your safety net. If you don’t formally disclose something, it’s as if it never happened—even if you told the investor over coffee. Be honest, clear, and detailed.

3. Use Specific Disclosures, Not Just General Ones

General disclosure (like “see Companies House”) helps, but it rarely protects you. Always make specific disclosures—especially for legal, financial, or IP risks.

4. Take Advantage of FounderCatalyst’s Support

The platform walks you through each clause, lets you upload supporting documents, and automatically creates your disclosure letter. Use it! It's designed to protect you.

5. Don’t Fear Over-Disclosing

Transparency now is safer than legal disputes later. Disclosure doesn’t mean the investor will walk away—it means they understand the risk before signing.

Want a Clearer Walkthrough?

For a practical breakdown (with worked examples), we strongly recommend you read:

Demystifying the Warranty and Disclosure Process (FounderCatalyst Blog)

This article:

• Explains the legal terms in founder-friendly language

• Shows how the platform helps at every step

• Includes examples of what to disclose and how

• Clarifies how your Intelligent Data Room and folders work

It's short, super practical, and worth bookmarking while you work through Schedule 4.

What You’re Being Asked to Warranty

Here’s a high-level overview of all the clauses you’ll be asked to confirm in Schedule 4 of your SSA.

Summary

• Warranties protect the investor. Disclosures protect you.

• The more accurate and honest your disclosures, the less likely you'll face issues post-close.

• Use the FounderCatalyst platform tools—they’re built to walk you through this.

• Read the full Demystifying the Warranty and Disclosure Process blog for worked examples, do’s and don’ts, and smart tips.