You’ve built a slick deck.
Your story is solid.
The projections are exciting.
The room nods along.

But then…
the investor team goes quiet.
They’re not calling back.
Your raise is “pending internal diligence.”
And it stays there.

Here’s the truth:

💡 Pitch decks impress. But data rooms close deals.

Most Founders Prep the Pitch. Few Prep the Backend.

Investors aren’t just buying the dream.
They’re buying clarity, compliance, and clean numbers.

Before money hits your account, their teams will comb through your financials, taxes, compliance, contracts — and they will find the cracks.

This is where most founders fumble.
The pitch is tight. But the backend is a mess.

What Do Investors Actually Double-Click in Financial Diligence?

Here are 5 numbers that get pulled up in every serious diligence — and why they matter.

1️⃣ CAC / LTV

📉 Customer Acquisition Cost vs. Lifetime Value

If you can’t show how much it costs to acquire a customer — and how much they return over time — your growth story falls apart.

Red flag: Founders quoting marketing spends as CAC, without factoring team, tech stack, retention cost, or churn.

📌 Diligence teams will recalculate this from your raw data. Be ready.

2️⃣ Working Capital Position

🧮 Can your business survive without investor cash?

Working capital = current assets – current liabilities.
It shows how long you can fund ops, pay vendors, and handle burn without outside help.

Red flag: Bloated receivables, delayed payables, inventory pile-ups.

📌 Healthy WC = stronger negotiation position.

3️⃣ Cash Flow Ratios

💸 Are your operations actually generating cash?

EBITDA can be positive. But if operating cash flows are negative — the model is unsustainable.

Red flag: High profits on paper but negative cash flow. Classic startup trap.

📌 They’ll ask for direct cash flow statements, not just P&L.

4️⃣ Tax Hygiene

🧾 Are your filings clean, timely, and consistent?

• Any GST notices?
  
• Pending IT returns?
  
• TDS mismatches?
  
• Unreconciled ledgers?
  

Even minor irregularities make VCs nervous about future penalties or valuation risks.

📌 We’ve seen deals get paused over an ₹11,000 late fee.

5️⃣ Legal & Statutory Dues

📁 Are there any unpaid dues, unresolved disputes, or RoC compliance issues?

Investors want clean cap tables, updated statutory registers, and full RoC/ MCA compliance.

Red flag: Delays in ESOP filings, missed board meeting documentation, or pending PF/ESI dues.

📌 Any legal loose ends = investor cold feet.

Real Talk: You Can’t Outsource Diligence Prep to Hope

You will be asked:

• “How recent is this data?”
  
• “Can you share workings?”
  
• “Is this reconciled with your tax filings?”
  

If you hesitate, defer to your CA, or say “we’ll get back to you” — confidence drops.

What Smart Founders Do Instead

They treat pre-diligence like a product sprint:

✔️ Run internal checks
✔️ Clean up filings & ledgers
✔️ Build the financial narrative behind the numbers
✔️ Create a data room BEFORE the investor asks for it

We Help Startups Pass Financial Diligence Every Week

Whether it’s a seed round or Series A, our Virtual CFO team:

• Audits your numbers like an investor would
  
• Flags gaps across finance, tax, and compliance
  
• Prepares your decks and your data room
  

And we’ve seen this work:

A client raising ₹6Cr got investor approval in 11 days after we ran a full diligence dry run.

Financial Diligence – Want to Know Where You Stand?

We’ll run a free pre-diligence scan of your finance stack — and tell you exactly what needs fixing. Get in touch with Pitchers Global today!