What kind of financial data should a company prepare when seeking Series A venture capital funding?
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My accounting firm’s clients have raised over $1 billion in venture capital and seed funding in the past 12 months, so we’ve seen a lot of financial data requests from venture capitalists. And, in the current funding environment, requests are becoming more expansive and detailed.
We recently compiled a list of the most common diligence requests (again, only for financial, tax and HR due diligence). Here are some of the most common items, and I’ll share a link to the full diligence list at the end of this response.
Common Financial Diligence Items
- Past 3 year financial statements (income statement, balance sheet, cash flow) - hopefully your accountant has easy access to these
- Bookings history (if it applies to your startup)
- 3 to 5 year projections, usually by month (cash position is an important item they want to see projected)
- Top 10 client invoices and contracts (only matters for b2b companies)
- Material contracts with vendors/suppliers
- CAC (customer acquisition costs - they may have a particular way they want to see this)
- Customer LTV
- Customer churn rate (assuming this applies to your startup)
You can see the full due diligence full here - it includes tax and HR diligence requests, in addition to the financial questions VCs ask.
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