My accounting firm’s clients have raised over $1 billion in venture capital and seed funding in the past 12 months, so we’ve seen a lot of financial data requests from venture capitalists. And, in the current funding environment, requests are becoming more expansive and detailed.
We recently compiled a list of the most common diligence requests (again, only for financial, tax and HR due diligence). Here are some of the most common items, and I’ll share a link to the full diligence list at the end of this response.
Common Financial Diligence Items
- Past 3 year financial statements (income statement, balance sheet, cash flow) - hopefully your accountant has easy access to these
- Bookings history (if it applies to your startup)
- 3 to 5 year projections, usually by month (cash position is an important item they want to see projected)
- Top 10 client invoices and contracts (only matters for b2b companies)
- Material contracts with vendors/suppliers
- CAC (customer acquisition costs - they may have a particular way they want to see this)
- Customer LTV
- Customer churn rate (assuming this applies to your startup)
You can see the full due diligence full here - it includes tax and HR diligence requests, in addition to the financial questions VCs ask.
Vanessa Kruze, a seasoned CPA, has an impressive track record prior to establishing Kruze Consulting. Her experience includes pivotal roles at Deloitte Tax and as a controller for a substantial startup with over 120 employees and $20 million in revenue. Under her leadership, Kruze Consulting has emerged as a distinguished CPA firm, recognized on the Inc 5000 list for five consecutive years, illustrating rapid growth and success in the competitive accounting landscape. Vanessa's unique approach, combining deep industry knowledge with advanced automation and software solutions, has positioned her firm as a leader in providing comprehensive accounting services to startups across the United States.
