The core requirements are straightforward. Investors want an income statement, balance sheet, and cash flow statement. Depending on the stage and deal size, they may ask for monthly breakdowns, supporting schedules, and projections. But having the right documents isn’t enough. The quality of the underlying data determines whether your numbers hold up to scrutiny.

Start with clean books. Financial statements are only as good as the accounting behind them. If your chart of accounts is disorganized, transactions are miscategorized, or bank reconciliations haven’t been done in months, those problems show up in the statements. Investors who review financials regularly spot inconsistencies quickly. Before generating investor-facing reports, make sure your books are accurate and reconciled.

Use accrual basis accounting. Most serious investors expect accrual-based financials, not cash basis. Accrual accounting recognizes revenue when earned and expenses when incurred, regardless of when cash moves. This gives a clearer picture of business performance and is required under GAAP. If you’ve been running on cash basis, you’ll need to convert before presenting to institutional investors.

Cover at least 24 months of history when possible. Investors want to see trends. One month or one quarter doesn’t tell them much. Two to three years of monthly data shows seasonality, growth trajectory, and how you handle different conditions. Early-stage companies may not have much history, and that’s understood. But whatever history exists should be consistent and well-documented.

Consistency matters more than complexity. Use the same chart of accounts structure period over period. Categorize expenses the same way every month. If you change how you recognize revenue halfway through, explain why. Utah bookkeeping services that understand investor expectations structure your books this way from the start, which saves significant cleanup later.

Revenue recognition gets scrutinized. How you book revenue and when you book it matters. Recognizing revenue too early, booking annual contracts as lump sums, or mixing deposits with earned revenue are common problems. Investors will ask questions, and you need defensible answers backed by documentation.

Prepare supporting schedules. Beyond the core statements, investors often want revenue by customer or product, accounts receivable aging, accounts payable detail, headcount summary, and a clear breakdown of cash usage. These supporting documents add credibility and save time during due diligence.

Ground your projections in reality. Financial models should connect logically to historical performance. Projections showing 400% growth with no explanation of how you’ll get there don’t impress sophisticated investors. Base your assumptions on real drivers like sales pipeline, conversion rates, and capacity constraints. Tie your forecast to what you’ve already demonstrated you can do.

Start the process early. Cleaning up financials and preparing investor-ready statements takes time. Rushing is how mistakes happen and deals fall apart during due diligence. If you’re planning to raise in six months, start preparing now. Getting capital raise support before you need it means your numbers are ready when opportunities appear rather than scrambled together under pressure. The best time to prepare for due diligence is before anyone asks for documents.