Having your ducks in a row is easy to do, and is critical in order to obtain capital from a lender, investor, VC, or other person / institution. Yet it’s amazing how many founders begin the fundraising process without first preparing their books and proper documentation which will save them a huge headache down the line.
So what do you need to have prepared? In short, you ought to at least have the following documents up to date and ready to go for any lender or investor:
- Balance sheet (previous 3 years, or as far back as applicable)
- Income Statement (previous 3 years, or as far back as applicable)
- Cash Flow Statement (previous 3 years, or as far back as applicable)
- Previous tax returns (previous 3 years, or as far back as applicable)
- Cap Table
And then, depending on the type of financing you’re pursuing, it may be helpful to also have the following:
- Accounts receivable aging report
- Accounts Payable aging report
- Investor Deck
- Financial projections
Most of this you can export out of your accounting software quite quickly, and you’ll have a smoother time with your investor conversations too. It’s a win-win, for a relatively low-effort output.