Organisations tend to treat fundraising as an event with a start date. Providers of capital treat it as an assessment that has been running since the first conversation — and much of what they are assessing is not in the model.
Response time is a signal
When a lender asks for a debtors ageing and receives it the same afternoon, they learn something about the finance function. When it takes eleven days and arrives inconsistent with the last set of accounts, they learn something rather different, and it is difficult to unlearn.
What to have ready before you need it
- Audited financial statements for the periods that will be requested
- Management accounts current to within one month, reconciling to the audited position
- A rolling cash flow forecast with visible, defensible assumptions
- Ageing analyses for both receivables and payables
- A clean, current record of related-party transactions
- Tax filings up to date, with any open matters disclosed rather than discovered
Disclose the problems yourself
Every organisation has something awkward in its history. Raised early and explained, it becomes context. Found during diligence, it becomes the entire conversation — and it re-prices the deal.
This article is general commentary and not advice on any specific set of facts. For guidance on your own circumstances, speak to our team.