Fundraise readiness audit: nine things a partner-led review actually finds
Most founders think they are ready six weeks before they are. A formal audit gives you a punch-list and a realistic timeline.
We run readiness audits as the first thing in most engagements. Half a day with the founder, half a day with the CFO, half a day inside the books. The pattern is consistent enough that I can tell you what we usually find.
One. Cap-table inconsistencies. A reconciliation between the cap-table spreadsheet, the ROC filings, and the signed board resolutions almost always surfaces at least one discrepancy. Sometimes a small one, sometimes a $200K-of-shares one. Either way, it has to be fixed before diligence.
Two. Outstanding share grants or notes. ESOPs promised but not papered. SAFEs or convertible notes that should have converted at the last round but were forgotten. These show up in three out of four audits.
Three. Audited financials that don't quite reconcile with the management accounts. The auditors made restatement adjustments at year-end that nobody told the FP&A team about. The model in the IM uses one set of numbers; the audited financials show another.
Four. Customer concentration that the founder has been quietly worried about. Top customer is 40% of revenue. Founder has been hoping to dilute that before going to market. Audit forces the conversation: either dilute it now, or have a clean story for why investors should accept it.
Five. Key-person risk that the cap-table doesn't capture. The technical co-founder has been threatening to leave for six months. The replacement is hired but not yet productive. Investors will ask. The honest answer requires a plan, not a denial.
Six. Governance gaps. Board meeting minutes haven't been signed. Annual general meetings missed. ROC compliance behind by two filings. None of these are deal-killers but each one delays diligence by a week.
Seven. Customer contracts that contain change-of-control clauses. A material customer can terminate the contract if the company's controlling shareholders change. In a Series A, this rarely triggers; in a Series C or an M&A scenario, it absolutely does. We start tracking these early.
Eight. Side-letter agreements that the founder forgot about. Angel from the seed round was promised informational rights or veto rights via a side letter. The Series A investor's lawyer pulls every related-party document and finds it. Now the side letter has to be amended.
Nine. Tax positions that look comfortable to the founder but uncomfortable to a diligence team. Aggressive depreciation, a related-party transaction that wasn't at arm's length, an undisclosed customer rebate booked above the gross-margin line. We flag these so the founder makes an informed call: disclose and explain, or restructure before going to market.
The audit takes two days of focused work. The fixes take anywhere from two weeks to two months depending on what surfaces. The point is to find these things before the investor's lawyer does, when the conversation is still about whether to invest, not whether to renegotiate the price.
