In a broad sense, the term is used for legal, financial and sometimes even a technological audit of a company and can be performed prior to a larger business transaction with a given company, with the aim to identify possible risks. It is necessary to distinguish between due diligence and the audit performed in accordance with accounting regulations.
In the context of investments in startups, it is primarily a process of a legal audit for a startup, carried out by an investor before the investment into a specific startup is made.
