Whether you are raising a first institutional round, refinancing with a bank or preparing for a listing, the same three tests decide the outcome.
1. The numbers
Audited or audit-ready financials, three years, on one consistent basis. A quality-of-earnings view that separates recurring profit from one-offs. Tax positions documented and defensible.
2. The controls
Segregation of duties, a close calendar, documented approval thresholds and reliable management reporting. Institutional capital prices control weakness as risk.
3. The story
A clear articulation of how the business makes money, what repeatable advantage it has, and where the next ₹100 crore of revenue comes from — supported by the model, not by assertion.
Common gaps
- Revenue recognised on a cash basis but presented as accrual
- Related-party transactions not documented at arm’s length
- Working-capital normalisation missing, leading to price renegotiation at closing
- ESG or governance disclosure requested by the investor and unavailable
Timing
Readiness work usually takes three to six months. Starting it after the term sheet is signed is the most expensive sequencing mistake in mid-cap transactions.