{"id":160,"date":"2025-06-16T15:23:04","date_gmt":"2025-06-16T15:23:04","guid":{"rendered":"https:\/\/www.cashweta.co.in\/blog\/?p=160"},"modified":"2025-06-16T15:23:05","modified_gmt":"2025-06-16T15:23:05","slug":"investors-look-for-in-your-financials","status":"publish","type":"post","link":"https:\/\/www.cashweta.co.in\/blog\/investors-look-for-in-your-financials\/","title":{"rendered":"What Investors Look for in Your Financials"},"content":{"rendered":"\n

Scene:<\/strong> Radha and Krishna gear up for their Series A pitch. Meera arrives with printed financial statements to guide them.<\/p>\n\n\n\n

Radha (nervous):<\/strong> Their term sheet looks promising, but I\u2019m anxious about our financials. What exactly will investors examine?
Meera (calmly):<\/strong> Investors dig deep into five key areas: cleanliness of books, revenue growth, cash flow, unit economics, and clarity of use of funds. Let\u2019s review each.<\/p>\n\n\n\n

1. Clean, Reconciled Records <\/h3>\n\n\n\n

Meera:<\/strong> Investors first check if your books are in order<\/strong>.<\/p>\n\n\n\n

    \n
  • Are bank statements reconciled monthly?<\/li>\n\n\n\n
  • Do invoices match revenues?<\/li>\n\n\n\n
  • Are expenses backed by receipts?<\/li>\n<\/ul>\n\n\n\n

    Krishna:<\/strong> Our accountant sends me reconciliations every quarter.
    Meera:<\/strong> Good\u2014quarterly is fine for early-stage. Annual audits should close within three months of year-end.<\/p>\n\n\n\n

    2. Revenue Growth & Trends <\/h3>\n\n\n\n

    Meera:<\/strong> They look for consistent growth<\/strong>. A single spike or dip needs explanation.<\/p>\n\n\n\n

      \n
    • Monthly Recurring Revenue (MRR)<\/strong> for SaaS.<\/li>\n\n\n\n
    • Quarter-on-Quarter (QoQ)<\/strong> or Year-on-Year (YoY)<\/strong> growth rates.<\/li>\n<\/ul>\n\n\n\n

      Radha:<\/strong> Our MRR grew 20% QoQ last three quarters.
      Meera:<\/strong> That\u2019s a strong signal for scalability, if you can sustain it.<\/p>\n\n\n\n

      3. Cash Flow & Runway <\/h3>\n\n\n\n

      Meera:<\/strong> Cash burn<\/strong> is more critical than profit.<\/p>\n\n\n\n

        \n
      • Burn rate<\/strong> = Net cash outflow per month.<\/li>\n\n\n\n
      • Runway<\/strong> = Cash on hand \u00f7 Burn rate.<\/li>\n<\/ul>\n\n\n\n

        Krishna:<\/strong> We have \u20b960 lakhs cash and burn \u20b920 lakhs a month\u2014three months\u2019 runway.
        Meera:<\/strong> Investors want 6\u201312 months<\/strong> runway post-funding. Plan accordingly.<\/p>\n\n\n\n

        4. Unit Economics <\/h3>\n\n\n\n

        Meera:<\/strong> This shows profit per customer<\/strong>. Key metrics:<\/p>\n\n\n\n

          \n
        • CAC<\/strong> (Customer Acquisition Cost)<\/li>\n\n\n\n
        • LTV<\/strong> (Lifetime Value)<\/li>\n\n\n\n
        • Gross margin per unit<\/strong><\/li>\n<\/ul>\n\n\n\n

          Radha:<\/strong> Our CAC is \u20b91,000 while LTV is \u20b94,000.
          Meera:<\/strong> A 4:1 ratio is healthy\u2014investors love that.<\/p>\n\n\n\n

          5. Use of Funds & Forecast <\/h3>\n\n\n\n

          Meera:<\/strong> Finally, they scrutinize fund allocation<\/strong>:<\/p>\n\n\n\n

            \n
          • Marketing 40%<\/li>\n\n\n\n
          • Product R&D 30%<\/li>\n\n\n\n
          • Hiring 20%<\/li>\n\n\n\n
          • Buffer 10%<\/li>\n<\/ul>\n\n\n\n

            They\u2019ll ask for milestones<\/strong> tied to each spend\u2014e.g., \u201c\u20b920 lakhs on marketing to drive MRR to \u20b910 lakhs in six months.\u201d<\/p>\n\n\n\n

            6. Compliance & Cap Table <\/h3>\n\n\n\n

            Meera:<\/strong> Investors also check:<\/p>\n\n\n\n

              \n
            • Statutory compliance<\/strong> (IT filings, GST returns, ROC filings)<\/li>\n\n\n\n
            • Clean cap table<\/strong> with accurate shareholdings and ESOP pool details<\/li>\n<\/ul>\n\n\n\n

              Krishna:<\/strong> We maintain our cap table in Carta.
              Meera:<\/strong> Great\u2014clarity prevents last-minute surprises.<\/p>\n\n\n\n

              Real-World Example <\/h3>\n\n\n\n

              Radha:<\/strong> Did this advice help past clients?
              Meera:<\/strong> A Pune fintech startup improved their CAC:LTV from 0.8:1 to 3:1 before pitching. They closed \u20b95 crores Series A within 45 days. Strong unit economics sealed the deal.
              Radha (confident):<\/strong> Now I know what to polish before our pitch.
              Krishna:<\/strong> Let\u2019s update our investor deck with these numbers.
              Meera:<\/strong> Exactly. Remember, investors look for strong fundamentals<\/strong> more than flashy slides. Solidify your financial story, and you\u2019ll win their confidence.<\/p>\n","protected":false},"excerpt":{"rendered":"

              Scene: Radha and Krishna gear up for their Series A pitch. Meera arrives with printed financial statements to guide them. Radha (nervous): Their term sheet looks promising, but I\u2019m anxious about our financials. What exactly will investors examine?Meera (calmly): Investors dig deep into five key areas: cleanliness of books, revenue growth, cash flow, unit economics, …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22,14],"tags":[13,32],"class_list":["post-160","post","type-post","status-publish","format-standard","hentry","category-accounting-services","category-chartered-accountant","tag-accounting-services-in-mumbai","tag-chartered-accountant-in-mumbai"],"_links":{"self":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/comments?post=160"}],"version-history":[{"count":2,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/160\/revisions"}],"predecessor-version":[{"id":194,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/posts\/160\/revisions\/194"}],"wp:attachment":[{"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/media?parent=160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/categories?post=160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashweta.co.in\/blog\/wp-json\/wp\/v2\/tags?post=160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}