Preparing finance for Series C diligence

By Series C, the financial diligence is no longer a checklist exercise. Investors arrive with a thesis, a model and a list of items they expect to find. What follows is what we see actually move conviction, and what costs founders weeks of avoidable cleanup.

What investors actually look at

• Quality of revenue: contracted vs. usage, multi-year vs. annual, gross vs. net of refunds.
• Cohort retention and net revenue retention computed from the underlying ledger, not the marketing deck.
• Gross margin bridges that reconcile to the trial balance, with hosting, payment fees and customer success cleanly attributed.
• Cash conversion: deferred revenue, AR ageing and the gap between recognised revenue and collected cash.

Six items to fix before the data room opens

• A single source of truth for ARR, agreed by finance and the CRM, refreshed monthly.
• Audited or audit-ready statutory accounts for the last two full years.
• A revenue recognition memo that documents your policy under IFRS 15, including treatment of overages, ramps and credits.
• An options and cap-table file that ties to board minutes, with all stock-based compensation expensed and disclosed.
• Transfer pricing documentation for any intercompany flows, even if balances appear small today.
• A clean working-capital schedule with a defensible normalisation of any one-off items.

Most rounds we support do not fail on the numbers themselves. They slow because the numbers cannot be reconciled to the source quickly enough, and momentum is what closes a round.