Scale-up Business Guide to Getting Investor-Ready: The Financials

Before approaching investors, you need to get your management accounts and everything associated with how you make money and spend money in order. 

Competency with regards to your company’s financials and your knowledge surrounding them is one of the most important aspects an investor is looking for. 

If your financials are not in order and/or you cannot speak confidently about them, then you are not investor ready and you will struggle to get funding. If this is the case for you then this article will help explain the essentials of how to get your financials in order.

What financials you need to show

The easiest way for a business to be evaluated and assessed by potential investors is through the three core financial documents; the company balance sheet, the income statement and the statement of cash flows. 

The balance sheet

The company balance sheet is a list of the business assets, liabilities and equity ownership. It is essentially a quickfire way to see what the business owns and owes. And the date of publication gives the investor the time frame these financial details are from. 

Make sure these are accurate. It may be tempting to leave in and out certain aspects of your business which may make your numbers look better – but it will only hurt the business further down the line. The most attractive businesses to invest in are the ones with a transparent and clear framework. 

Below is an example of a balance sheet from the tech company Zoom taken from WSJ Markets.


You can download templates for your own balance sheet here. They are laid out as follows.




Profit and loss statement (P&L or income statement)

The profit and loss statement is a table of the business’s operational performance for the given period which is usually a year for non-public companies. It essentially shows the profit and loss over the year. 

The statement will show your company’s:

  • Revenue
  • Costs
  • Gross profit
  • Income
  • Other expenses
  • Taxes paid
  • Net profit

Your Income Statement should be laid out logically and clearly, making for easy viewing. The key to much of the financials is clarity and simplicity. If this is a weakness of your business then you could consider hiring a Part-time Finance Director to help you through the process. 

Below is a copy of Zoom’s profit and loss statement taken from WSJ Markets. 


You can download templates for profit and loss statement here: They are laid out as follows. 




Statement of cash flows

The third essential financial document. The statement of cash flows details any changes to the cash account during the given period. This shows how well a business has managed money coming in and leaving their company. 

It will highlight the level of financial organisation your business has, as it will detail, for example, how you managed to pay off debt and finance expenses in running the business. 

This statement will show the exact amount of cash your business will have in hand for a given time period.

Below is a copy of Zoom’s statement of cash flows taken from WSJ Markets. 


You can download statement of cash flow templates here: They are laid out as follows:


Explanatory notes

Your explanatory notes are not one of the three essential financial documents but they can be used helpfully to give extra details.

You can explain in greater detail certain aspects of your financial statements. This could include your inventory methods, contingent liabilities and ownership equity. 

‘What if I haven’t been trading long enough to have all of these documents?’

If you haven’t been trading for a year and therefore don’t yet have these documents to hand then you can still be investor ready. What your business would have to do is forecast your future financials.

Now, obviously this isn’t factual like with financial statements so if you’re forecasting you have to be extra convincing that you know what you’re talking about. You need to put in the leg work to understand all of the financials in order to convince an investor the business is worth putting money in to.

What investors are looking for

Within your financial documents there are specific business details a potential investor is looking for. You need to know what these are because then you can make them clear and stand out on your documents. 

Net Profit

The investor wants to see whether your business is making money or not. It’s not the end of the world if you’re not because through your statements you can show clearly that the business is heading towards profit. 

You can also have profit that is clearly unsustainable. 


Investors assess the risk over the reward to begin with. Therefore if you can prove that people buy what your business offers then that immediately eases some fears over risk and will increase your chances of securing investment. 


Once you’ve established that customers buy what you offer you then need to prove that you make a good profit while doing it. If you’re selling a lot but not making any money then that will be a turn off for an investor.

Customer Acquisition Costs

This is the amount it costs your company to gain one customer. You could have very good margins but it’s so difficult to gain a customer that overall you’re still not bringing in much money. Also can you keep a customer once you’ve got them?


Debt is a part of business but it scares investors because it could mean they don’t get their money back. Make sure you can show clearly how you will pay off your debt and keep it as low as possible.

To sum up

You have to do your homework on your finances. If an investor can sense that you are not fully clued up on the financial side of your business then they will not invest. 

Don’t lie and be crystal clear. They are the two most important aspects of creating and showing your business financials. 

If you are finding the organisation of your financials difficult as a business then you can hire a Part-time Finance Director. The Director can work with your leadership team to craft business forecasts and create business plans to maximise profits and reduce costs.  

Getting investor-ready? Read more about:

The People

The Raise

The Pitch

The Marketplace

The Customers

The Plan for Exit

Written by: John Courtney

John is highly ranked in the Top 100 UK Entrepreneurs list by City AM and is winner of the Lifetime Achievement Award from techSPARK. He has been a Board Director himself for over 40 years and first started placing Non-Executive Directors over 25 years ago. John founded and ran seven of his own businesses including a Management Consultancy for 10 years, a Corporate Finance offering for 10 years and a mid-sized Digital Agency for another 10 years.