Raising capital is a defining moment for any growing business. But too often, promising companies stumble during due diligence not because they lack potential, but because their financial operations aren’t investor ready. Inconsistent reporting, weak processes, and limited cash flow visibility can quickly erode trust.
Investors don’t just want vision. They want discipline. They want proof that your business is built to scale.
Here’s how one fast-growing tech company transformed its finance function and unlocked a $27M Series A.
The Challenge: Gaps That Could Derail Funding
The company was generating millions in ARR, but their internal finance practices weren’t keeping pace. Key issues included:
- Vendor invoices were only recorded once paid, delaying expense recognition
- Accounting was on a modified cash basis with minimal documentation
- Journal entries lacked descriptions, reducing transparency
- Client invoices were delayed, and collections were inconsistent
- No forecasted financial statements, just a basic cash flow model
- Most critically, their books weren’t US GAAP-compliant
These gaps weren’t just operational; they were strategic risks that could stall investor confidence.
The Solution: Building a Finance Function That Inspires Trust
To close the gaps, the company brought in outsourced finance experts to overhaul their accounting, FP&A, and CFO advisory. Within months, the transformation was underway:
- Process & System Upgrades
- Centralized AP system for vendor invoices and approvals
- Shared tracking tools for purchase orders
- Weekly AR aging reports to drive timely collections
- Compliance & Reporting Enhancements
- Shifted from modified cash to full accrual accounting
- Implemented proper revenue recognition and reconciled deferred revenue
- Established GAAP-compliant processes for audit readiness
- Forecasting & KPI Integration
- Built forward-looking financial models with key metrics
- Refined ARR methodology for accuracy and consistency
The Outcome: Investor Ready and Fundraising Confident
The results were immediate and meaningful:
- Full GAAP compliance eliminated red flags
- Cash flow stabilized through faster invoicing and collections
- ARR and KPI reporting became transparent and reliable
- Financial statements were investor-grade and backed by solid forecasting
When fundraising began, the company was ready. Due diligence was smooth, responses were fast, and investor confidence was high. The $27M Series A closed with momentum.
What This Means for You
If you’re preparing for a funding round, ask yourself:
- Are your books GAAP-compliant and audit-ready?
- Do you have real-time cash flow visibility?
- Can you present forecasts and KPIs that tell a compelling story?
Strong financial operations aren’t just about ticking boxes, they’re about building trust, reducing risk, and unlocking growth.
How We Can Help
Investor readiness often starts with audit readiness. If you’re unsure whether it’s time, check out our guide: When does your company need an audit? It breaks down the key triggers and how audits fit into the fundraising journey.
At Tarsus, we help growth-stage companies get investor-ready through:
- Audit readiness support
- Investor-grade financials
- CFO advisory aligned with your growth strategy
Whether you're gearing up for a raise or simply want to tighten your financial controls, we’re here to help.
Contact us today to explore how we can support your next chapter.
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