Most founders start preparing for a fundraise the moment they start a fundraise. By then, the data room is being built in real time, the financials being cleaned during diligence, and the model being rebuilt under investor pressure.
The companies that raise fastest with the cleanest terms do something different: they treat the 12 months before a raise as a finance project. Here’s what that project looks like.
12 months out
The goal at this stage is establishing the financial infrastructure that will hold up to diligence — without yet committing to a specific raise timeline.
Move to accrual-basis accounting. If you’re still on cash, this is the time. Cash-basis books don’t pass institutional investor diligence. The conversion is painful in real-time and worse during a raise.
Implement monthly close discipline. A clean monthly close by business day 10 means your investors are looking at fresh data, not three-month-old approximations. This is the single most important habit to establish.
Build the metrics dashboard you’ll need. ARR, NDR, GRR, CAC payback, gross margin, net new ARR by month, customer count by segment. Build the reporting infrastructure to produce these reliably. By 6 months out, you need 12 months of clean history on every metric.
Address revenue recognition. If you have any ASC 606 fragility — setup fees, multi-year contracts, professional services bundles — fix the methodology now. Don’t restate during a raise.
Document your chart of accounts. Every account should have a definition. Investors will ask why certain expenses are in certain places.
6 months out
The infrastructure should be in place. Now the work is on materials and decisions.
Build the model from scratch. Not “update the existing model.” Build it from the unit economics up, with current data, current pricing, current cohort behavior. The previous model was built for the previous raise; it has accumulated assumptions, patches, and quirks. Start fresh.
Lock the metrics narrative. What’s the story your numbers tell? “Strong NDR but lumpy new logo growth.” “Improving CAC payback but compressed gross margin from new pricing tier.” Every metric should have a one-sentence explanation that ties to the broader business narrative.
Build the 24-month forecast. Investors will ask for at least 24 months of projection, with assumptions broken out. Show base case, upside case, downside case.
Pre-stage the data room. Identify which documents will go in: financials, customer contracts, cap table, vendor agreements, IP register, employee agreements, board materials. Start compiling. Most companies underestimate how long this takes.
Decide on the round structure. Size, target valuation range, dilution comfort, lead vs. participation, whether to allow strategic capital, whether to do a primary-only or include secondary. These decisions shape the entire process and shouldn’t be made under pressure.
Identify and brief board. Investors will reference-check your board. Make sure your existing investors and independent directors are aligned on the round’s purpose, size, and timing.
3 months out
The fundraise is real now. Final preparation.
Finalize the deck. 14 slides max. Each slide should have a single message. Cover, problem, solution, traction, business model, market, competition, GTM, team, financial summary, use of funds, ask, vision.
Refresh financials through the most recent month. Your model should be tied to a closed month. Investors will ask “what’s the latest.” Be ready.
Stress-test the model. Have someone (a board member, a former finance leader, a fractional CFO) try to break your model. Look for hardcoded numbers that should be formulas, formulas that should be hardcoded inputs, scenario logic that doesn’t actually flex anything.
Build the investor list. Tier 1 (top targets, where you’d take the round), Tier 2 (good fits but second priority), Tier 3 (relationship-building for next round). 25-40 firms total.
Get introductions lined up. Warm intros from existing investors, board members, advisors, and operators in your portfolio. Cold outreach has a place but should be minimized.
Prepare the management presentation. This is the live version of the deck — the one you’ll walk investors through in partner meetings. Practice it. Have your finance lead do the financial walk-through. Have the founder do the vision and team sections.
During the process
Maintain monthly close. The process is going to consume your attention. The team needs to keep running the business. Don’t let the close slip.
Keep updating the model. As you get questions, update the model — even just the assumptions narrative. By the time you’re at a term sheet, the model should reflect everything you’ve learned during the process.
Track every question. Every diligence request becomes a document in the data room or a memo. Build the library as you go so subsequent investors get cleaner, faster answers.
Have a war room rhythm. Daily or every-other-day standups with the deal team. Status on every active investor. Outstanding requests. Next steps.
What the finance function is doing in parallel
While the founder is in pitch meetings, the finance function is:
- Running diligence requests
- Updating models for new scenarios investors propose
- Maintaining the data room
- Producing weekly metric updates
- Preparing for legal diligence with the firm’s GC
- Managing the cap table and pro forma analysis
This is why a serious fundraise needs a serious finance function. The founder cannot run a fundraise and run finance simultaneously.
We act as the finance function during fundraises for clients who don’t have a full-time CFO. From the 12-month prep through close, we run the financial workstream so founders can run the process. Most of our fractional CFO engagements include fundraise support as a core deliverable.