Fundraising readiness: what investors actually look for in a startup's books — and the 5 things that stall a deal

A term sheet is not the finish line. Between the term sheet and money in the bank sits due diligence (DD) — the phase where investors open your books line by line. From our experience supporting Vietnamese startups through DD, most deals slip by 4–8 weeks not because of the business model, but because the books cannot answer the questions in the data room. Here is what the buy side actually looks at, and how to prepare early.

The 5 things investors check first

1. Is revenue real — and consistent?

Investors triangulate three sources: revenue in the management reports you sent them, revenue on your VAT declarations, and cash actually arriving in the bank. If the three diverge by more than a few percent without explanation, that is the biggest red flag there is. Be especially careful if your pitch deck quoted GMV while the ledger correctly records only commission revenue.

2. Is founder money separate from company money?

A founder's personal account collecting revenue, the company paying family expenses, an unexplained VND 800 million "director advance" sitting on the balance sheet — findings like these make the buyer's lawyers draft pages of warranties, and your valuation moves down with each one. Clean these up before opening the data room; do not let them be discovered.

3. Runway and burn rate recomputed from raw data

Investors will do their own math: cash on hand divided by the average burn of the last 3–6 months. If you said "12 months of runway" and their number says 7, every other figure in your deck inherits the doubt. A monthly cash-flow schedule, updated within the last 30 days, answers this instantly.

4. Hidden tax and insurance liabilities

Retrospective tax and social insurance assessments are the most common "hidden debt" in Vietnamese startups: foreign contractor tax on the SaaS tools you already use, PIT on bonuses and ESOP, insurance on the portion of salaries paid "outside the contract." Buyers typically respond with a holdback equal to the estimated exposure — your own money locked up over issues that were fixable in advance.

5. Bilingual reports a non-Vietnamese partner can read

Regional funds run their process in English. If your entire ledger exists only in Vietnamese Circular 200 formats, every DD Q&A round costs extra days of translation and reconciliation. Vietnamese–English bilingual management reports, with a P&L structured the way investors are used to reading, are a genuine competitive advantage when you are running parallel processes with several funds.

A 6-month preparation roadmap

• Months 1–2: Re-review the last 24 months of books; clear founder-related suspense balances; reconcile revenue across the three sources until they agree.
• Months 3–4: Standardize monthly bilingual management reporting: P&L by business line, cash flow, and the operating metrics funds will ask about (gross margin, CAC where relevant, months of runway). Close on a fixed rhythm — numbers more than 15 days stale are unusable in DD.
• Months 5–6: Build the data room: charter, licenses, major contracts, three years of tax filings, payroll and labor contracts. Consider an independent financial statement review — it costs far less than letting the fund discover the problems and reprice the round.

Clean books are an asset with a price

A startup that typically closes within 7–10 working days, reports bilingually and carries no hidden tax exposure gets through DD in 3–4 weeks instead of 2–3 months — and in fundraising, speed is negotiating leverage. 3M's management reporting and full-service accounting are built for exactly this stage: AI on the Practica platform keeps the ledger current daily, senior accountants own the review, and outputs come out bilingual, data-room ready.

Planning to open a round in the next 6–12 months? Book a free DD-readiness assessment — we will show you what the fund will ask, while you still have time to fix it.