Preparing for Series A

§ QUICK ANSWER

What does Series A financial due diligence actually cover?

Series A financial due diligence covers: historical financial performance (3+ years of accounts where available, plus management accounts bridging to current month); revenue recognition methodology and consistency; customer concentration analysis (revenue by top customers, churn, retention metrics); cap table verification (every share, option, warrant, convertible note traced to documents); IP ownership (every founder and contributor IP assignment in writing); tax compliance (corporation tax, VAT, PAYE, R&D claim history, SEIS/EIS compliance certificates); financial controls (segregation of duties, expense policies, payroll integrity); financial forecasts (assumptions documented, sensitivity tested); and any material litigation or contingent liabilities. The depth varies by deal size; Series A typically takes 4-8 weeks of formal due diligence supplementing earlier indicative diligence.