The 6-month timeline
- Months 1-2: foundation. Clean historical numbers (last 12-24 months), reconcile bank, recognise revenue correctly, ensure ARR/MRR is definable and consistent.
- Month 2-3: model build. 3-year P&L, balance sheet, cash flow with explicit driver assumptions. Scenarios (base, bull, bear). Runway analysis.
- Month 3-4: KPI dashboard and metrics. ARR, NRR, GRR, gross margin, CAC payback, magic number, sales efficiency. Calculated correctly, reportable monthly.
- Month 4-5: data room build. Cap table, board minutes, contracts, customer references, IP, legal, financial statements, model.
- Month 5-6: process design. Pitch deck refinements, investor list, intro strategy, anti-dilution clarity, first-call calendar.
- Month 6+: process. First-call cadence, follow-up materials, term sheet negotiation, due diligence response, close.
What investors actually check
- Revenue quality — recognised correctly, growth genuine (not from one-off contracts), NRR healthy
- Unit economics — gross margin trajectory, CAC payback period, customer concentration
- Burn and runway — net burn rate, runway at current burn, runway under scenarios
- Cap table cleanliness — no nightmare options, clean previous-round terms, founder vesting healthy
- Customer evidence — case studies, references, retention, concentration risk
- IP and contracts — IP assigned to the company (not individuals), key contracts clean, no anti-investor clauses
- Team — key hires, gaps, retention
- Plan credibility — does the model's growth plan make sense given the team and market?
Common diligence traps
- ARR not actually contracted — counting verbal commitments or month-to-month as 'ARR'
- Revenue recognition errors — recognising upfront cash as immediate revenue rather than over the contract term
- Hidden customer concentration — top 3 customers being 50%+ of revenue, not flagged
- Founder receivables — money loaned to or owed by founders without proper documentation
- Stock options without HMRC notification — UK EMI schemes that weren't notified to HMRC within the window
- R&D claims that don't survive scrutiny — overclaimed R&D credits that get clawed back
- VAT or PAYE arrears — unpaid HMRC liabilities sitting in the balance sheet
A fractional CFO 6 months before the raise typically catches these and fixes them before diligence. A founder-only fundraise typically discovers them mid-process and either delays or accepts a lower valuation.
FAQ
Frequently asked questions
How much does fundraise prep cost?+
Project-based engagements typically £15-50K depending on stage and current state. Ongoing fractional CFO continuing through the raise: 4-6 months × £3-6K/month.
What if we're already in process?+
Mid-process help is possible but more expensive and harder. The best fundraise help happens 6 months ahead. If you're already pitching with weak materials, get help immediately.
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