What Investors Look for in Financial Due Diligence
Before writing a cheque, sophisticated investors go through a structured due diligence process. Knowing what they're looking for helps you prepare a stronger case.
Due diligence is the process investors use to verify the claims made in your pitch deck. It's not a formality — it's where deals fall apart or gain momentum.
The Four Areas Investors Scrutinise
Historical Financials — Investors want 2–3 years of audited or management accounts. Unit Economics — CAC, LTV, payback period, and churn rate are the core metrics. Cap Table & Equity Structure — Who owns what? Cash Flow Projections — Investors don't expect perfect forecasts, but they do expect internally consistent models.
The Data Room
A well-organised data room signals professionalism. At minimum it should contain: incorporation documents, cap table, last 3 years of accounts, current management accounts, board minutes, IP assignments, and key customer contracts.
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