Fundraising Fundamentals Chapter 1: The Silent Audit You’re Already Under
This is part one of our three part series on funding readiness. In this installment we show how weaving due diligence into your routine builds the quiet confidence investors seek. In chapter two we will dive into the unit economics which prove your growth engine works. In the final chapter we will guide you in weaving those insights into a pitch narrative that secures the valuation your company deserves.
We are also pleased to share that we have partnered with Diligentsia, whose expertise in legal and governance due diligence will complement Fractionality’s financial leadership for founders. It is a partnership built on a shared belief: that robust, clear-sighted preparation is what underpins the best outcomes in any transactional process.
You might think due diligence only starts when an investor asks for your data room. In reality it begins much earlier, long before you press “send” on your deck. Everything about your business is quietly under the microscope: your cap table, your latest accounts, even the tone of your blog posts. Leave this to the last minute and you’ll end up juggling frantic fixes under the harshest spotlight.
Routine, Not Ritual
Too many founders treat due diligence as a fire drill. Let’s flip the script. Once you have the idea of handing this over to a fractional CFO the picture becomes clearer. They take the lead; they close the books, comb through every invoice and bank entry, make sure your profit and loss statement stacks up and your balance sheet balances. Small mistakes and red flags get spotted and fixed well in advance, so you never scramble when investors knock.
Your cap table needs the same level of care. It must match the official registrar records down to the last share class. When an investor clicks through and finds perfect alignment they feel more than relief at neat numbers - they know you take governance seriously.
These steps are far more than box ticking exercises. This forms the foundation of trust.
Making them part of your monthly habit shows that your venture blends startup agility with the discipline investors prize. When investors see perfect alignment, they don’t just breathe easier, they trust you’ve got your house in order.
Contracts Under Inspection
Contracts often play the unsung protagonists in your growth story until a small print issue erupts at the last minute. Too many teams ignore them until a sharp eyed lawyer spots an auto renewal clause or a vague liability cap just days before sign off. By then you may have already toasted success. Racing to patch the deal can undo months of goodwill, rack up legal fees and strain even the strongest partnerships.
Bringing in a fractional CFO could help you set up a regular contract health check. You would focus on the handful of terms that really matter: payment dates, change of control rules and exit penalties and give each a quick health note. You might find that your prime supplier can levy hefty termination fees or that key customer agreements accelerate penalties after thirty days. Treating contracts as living documents instead of dusty archives helps you catch these pitfalls long before they become deal breakers.
By making contract inspection part of your company culture you defuse hidden traps early. Investors value founders who spot hurdles in advance rather than scramble to fix them. Trust is built as much on a tidy lease agreement as on an inspiring growth chart.
A Visible Trail
At the end of every month your board pack should land like a polished briefing. Use a clear naming system, keep each file in a single well organised folder, and think about the narrative in each pack as an opportunity to tell a story and weave your narrative (more about that in the final part of this blog series). Investors who click through will trace the evolution of your story one refined forecast and one updated KPI chart at a time.
This is not bureaucracy. It is a living record of your decision making. When every revision is on display stakeholders see exactly how you refine projections, sharpen insights and address risks. There are no hidden edits or surprise questions, only a transparent log that shows you handle complexity with care.
The Payoff
When due diligence becomes part of your monthly routine, walking into the data room feels like revisiting familiar ground, not facing an interrogation. Questions about your cap table or contracts turn into moments to show you’re in command, not scrambling for answers.
That calm confidence is contagious. Investors move from cautious probing to swift commitment. Deals close faster, valuations stay steady and you preserve the trust that is so easy to lose. Most important of all, you prove that you respect detail as much as direction.
