[aiisahik]

Diligence for an equity round = when lawyers who represent the investors go through all the documents of a company. If something looks bad, they will make the company and its attorneys fix it, incurring time and legal fees. This usually doesn't happen much in the seeds stage but will definitely happen in Series A and beyond. I used to do this for a living and if I saw something like this contract here I would probably tell the company to get it resigned from the contractor using a more comprehensive contract. The company would probably need to pay the contractor a small fee too to make sure the new contract was enforceable.