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How to Prep Your Startup's Financial Documents for Investors

Updated: Apr 8

So you're ready to start sourcing capital for your startup. Of course, you know you’ll need to present your financials to prospective investors. But what does that mean, exactly?

How to Prep Your Startup's Financial Info for Investors

While there’s no set standard for startup financial reporting, there are some basic elements that you should include, even if just on a single slide in a pitch deck. If investors or lenders are interested in your business, you should expect to go deeper into the details.

Here is what investors will want to see no matter what stage of the funding process you’re in:

1. Revenue projections 

How do you expect your revenue to grow and where is it going to come from? Lay this out in a time chart — a four-year revenue projection is typical. You won't have a crystal ball, but you should be able to present a realistic possibility for future revenue generation.


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2. Operational expenses 

Investors will want a sense of how your expenses will likely expand as your company grows. Elements of this category include costs like staffing, production, marketing, and overhead such as rent and supplies.

3. Cash flow forecast

How much cash do you expect to be going in and out of the business over a given period of time? This can be a tricky part of the picture to portray for seasonal and other up-and-down businesses, but being upfront about those variables will serve you well.

Each month, you should update your financial plan showing how money will be allocated and spent over the next 18 to 24 months. Forecasting your costs — aka, your cash burn rate — is an essential practice for not only maintaining your startup's financial health but also conveying your fiscal responsibility to potential investors. So, spend extra time here to get this as accurate and realistic as possible.

If you’re looking for a large amount of growth capital for your startup, you’ll likely need to provide a financial model with projections. These spreadsheets break out all the elements of your business using formulas that can be manipulated to assess the potential value of the company under various scenarios.

It's best to avoid over-complicating your financial projections, though.

Here's a simple approach:

Base your financial model on two to three years of your financial statements. You'll pull your historical financial data into Excel and make some assumptions about the future to reverse engineer your projections. This allows you and your investors to see how the values change if, say, you hire a new sales rep or slow down marketing efforts in the off season.

4. Other financial documents

In addition to a financial forecast model, investors and lenders may want to see other financial documents, including:

  • Your startup's balance sheet

  • A pro-forma income statement detailing your projected revenue and expenses

  • Current and previous year financial statements (preferably audited ones)

  • Tax returns

  • Insurance policies

  • Capitalization tables

  • Lists of liabilities and accounting methodologies

While you should be working with financial professionals to ensure you’re ready to provide complex financial documents if needed, your primary objective in the quest to secure funding is to have a good handle on the three main elements of your business's financial stability:

  1. Revenue

  2. Expenses

  3. Cash flow

With this basic info clearly laid out, you should feel confident in approaching investors with your initial ask. Good luck!


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