Preparing Financial Documents for Series A Funding
Securing a Series A round is a pivotal milestone for startups transitioning from early-stage to significant growth. But less than a third of seed-stage startups make the cut. Data shows only 13% of companies that raised seed in H1 2022 advanced to Series A, dropping from 20–24% in 2018. With such selectivity in today’s funding environment, well-prepared financial documentation can make or break the opportunity.
Why Financial Preparation Matters
- Investor confidence
Detailed financials signal transparency, discipline, and readiness—three attributes VCs prioritize at this stage. - Due diligence readiness
Well-structured docs reduce friction and accelerate the diligence process, critical when only 20–30% of seed-funded startups progress. - Valuation leverage
A compelling financial story—backed by data—commands better terms and helps negotiate valuation and equity stakes efficiently.
Series A Financial Stats At a Glance
| Metric | Value |
| Seed → Series A (2022 cohort) | 13% |
| Seed → Series A (2018) | 20–24% |
| Seed → Series A (2019 → 2021) | 27.5% → 17.6% within 2 years |
| Average time Seed → Series A | 18 months |
| Series A → B progression | 65%; 35% fail post-A |
| Monthly burn for Series A startups | 47% burn ≥ $400 k/month |
These statistics highlight the need for precision, clarity, and strong financial traction.
Essential Financial Documents to Prepare
1. Historical Financial Statements (3 Years)
- Income Statement: Revenue, gross profit, net profit trends
- Balance Sheet: Assets vs. liabilities, equity structure
- Cash Flow Statement: Sources and uses of cash
Why it matters: Investors review historical performance to assess growth, stability, and risk.
2. Monthly Profit & Loss Statements
Break down the last 12–24 months:
- Revenue growth month-over-month
- COGS, operational expenses, and burn rates
Investors expect visibility into short-term trends during Series A discussions.
3. Revenue Projections & Forecasting (3–5 Years)
- Use realistic revenue assumptions, projecting at least 3× year-over-year growth when possible (e.g., > $100k/month).
- Present a five-year model with sensitivity analyses and cash runway projections (12–18 months).
Cash flow modeling and burn forecasts show investors that you can steward their capital wisely.
4. Key KPIs & Metrics
Focus on relevancy:
- CAC vs. LTV: Demonstrates unit economics
- Churn rates: Net retention health
- Bookings, ARR/MRR: Crucial for SaaS or recurring revenue streams.
- Growth momentum: 10–20% month-over-month growth cascades into 3–9× annual growth.
5. Cap Table & Equity Structure
- Detail equity ownership, including founders, employees, and options.
- Ensure clarity on anti-dilution or liquidation terms.
- A clean cap table shows governance readiness in fundraising.
6. Legal & Compliance Documents
- Entity documentation (e.g., Delaware C‑Corp), bylaws, stock certificates
- Term sheets, investor rights, voting agreements, and amended incorporation articles.
7. Contracts & Customer Agreements
- Highlight the top 10 contracts or invoices, vendor agreements, and recurring subscriptions.
- Emphasize stickiness and revenue assurance.
Financial Modeling Best Practices
- Build from actuals
Historical accuracy ensures forecasts reflect real trends for credibility. - Use Driver-based Models
Tie revenue to user growth, pricing, and lead conversion, rather than arbitrary assumptions. - Create Scenarios
Baseline/pessimistic/optimistic models help manage expectations. - Highlight the burn runway
Clearly illustrate that you have a 12–18-month runway post-Series A. - Include charts
Use visuals for growth stages, revenue, and cash flow trajectories—especially for those less fluent with spreadsheets.
Strategic Insights to Elevate Your Materials
Emphasize Traction & Inflection
Series A isn’t seed—it’s about proven growth. Investors expect sustained monthly growth (10–20%) and inflection curves in revenue or users.
Showcase a Team with Execution Power
Less than 10% of seed-funded startups raise a Series A, while the rest fail due to weak team execution. Highlight key hires and why they accelerate growth.
Preempt Investor Questions
- Why is growth plateauing at times? (Explain seasonality or sales cycles)
- What are your cash burn assumptions?
- What if growth stalls? (Contingency plans)
Predicting rough questions and answering them eliminates doubt.
Use Visual “Bunkers” in Your Presentation
Just as a physical bunker shields occupants in war, build strategic documentation bunkers to reinforce investor confidence, backed with backup schedules and hidden tabs.
Common Diligence Requests
VC due diligence typically includes:
- The last 3 years of audited or unaudited financials
- 3–5 year monthly projections with cash position insights
- Top customer contracts and invoices
- Breakdown of CAC, LTV, churn
- Cap table and capitalization schedules
- Legal agreements and compliance documentation
Series A Funding Timeline
- Seed → Series A: Typically 18 months.
- Series A → B: 10–18 months, with 65% progressing.
This means your financial materials must span at least 36 months of data + 36 months of forecasts.
Series A Readiness Checklist
- Financial Statements: Historical income, balance sheet, cash flow (3 yrs).
- Monthly P&Ls (12–24 mos).
- Financial model with scenarios and unit metrics (CAC, LTV).
- Cash burn analysis with 12–18 months’ runway.
- Cap table & dilution modeling.
- Customer contracts and top invoice proof.
- Legal docs: entity, stock certs, rights agreements.
- Board materials: updates, KPIs.
- Pitch deck with data visualizations, “bunkers” of backup slides.
- Infographics or dashboards built with tools (e.g., our internal Bunkertech model) ensure consistent data formatting.
Tips to Stand Out
- Narrative alignment: Align financials with product roadmap and go-to-market strategy.
- Benchmarking: Compare your metrics against industry norms (e.g., 47% of Series A firms burn >$400k/month)..
- Clean modelling: Use transparent formulas with assumptions clearly tagged.
- Professional audit or review: Increases credibility, especially from a reputable firm.
- Tech-enabled interface: Consider investor portals or tools that allow dynamic replay of models (think “Bunkertech”‑style dashboards).
Post-Presentation Know‑How
Even after the pitch, investors will conduct deep dives. Ensure:
- All data links in models work flawlessly
- Backup schedules detail every line item.
- All contracts are stored with metadata.
- Audits or reviews include detailed notes
A solid bunker of documentation ensures smooth post-pitch diligence.
Final Thoughts
Raising Series A is a rarity—historically, only 20–30% of seed-stage startups succeed, sometimes dipping to just 13%.. Beyond the startup idea, success hinges on clarity, data, and execution, rooted in meticulous financial preparation.
Strong documentation, clean models, and a compelling narrative—supported by solid metrics—position you as a disciplined, investor-ready team. Think of your financials as a bunker: secure, transparent, well-structured. Tools like Bunkertech can enforce consistency across reporting, ensuring every investor meeting resonates confidently.
If you’d like help crafting a Bunkertech‑style model or validating your documentation, I’m happy to assist or recommend expert resources.
