What investors expect from your finances before a funding round
Investors judge a company's finances before they judge its plans. Clean records, a believable forecast and clear answers make a raise quicker and give you more control over terms. This guide covers what investors usually expect to see and how to be ready before the first conversation.
Up-to-date, accurate books
Investors expect your bookkeeping to be current, reconciled to the bank and in a cloud system they can be given access to. Late or untidy records raise questions about everything else. If the books are behind, fixing them is the first job. See our [bookkeeping](/bookkeeping) service.
Regular management accounts
A monthly pack with a profit and loss account, balance sheet, cash position and short commentary shows that you track the business. [Management accounts](/management-accounts-explained) that arrive on time each month are a strong signal of control.
A forecast you can defend
Investors will test your assumptions. A good forecast ties revenue to something real, such as pipeline, pricing and conversion, shows costs growing in step with hiring and ends with a clear cash runway. See our guide to [building a cash flow forecast](/cash-flow-forecasting-guide).
A tidy cap table and company records
Know who owns what, which share classes exist and where the statutory registers and filings stand. Gaps in Companies House filings or share records slow due diligence. Our [company secretarial](/company-secretarial) service covers this.
Tax scheme readiness
If you are offering SEIS or EIS, investors will usually expect advance assurance before they commit. See our guides to [SEIS vs EIS](/seis-vs-eis) and [advance assurance](/seis-eis-advance-assurance-application).
Key numbers and a clear story
Be able to explain your revenue, margins, burn rate, runway and how the money raised will be used, without hunting for the figures. Investors want to see that the person leading the company understands the numbers.
A simple pre-raise checklist
- Books reconciled up to the latest month end
- Management accounts for the recent months
- A forecast with stated assumptions and scenarios
- A current cap table and up-to-date statutory records
- Advance assurance in hand, if using SEIS or EIS
- A named person who can answer finance questions
How Elm can help
We help founders get investor-ready: tidying the books, producing management accounts, building forecasts and supporting due diligence. See our [support for founders](/founders) and [fractional finance director](/fractional-finance-director) service.