But the kind of data you present depends a lot on the stage of your startup and the kind of investor you're looking at.
As an investor himself, Sam had this advice to give: "If we're talking about seed [funding], they'll be investing more in the team, personality, vision, and market-depending on the stage."
He goes on to advise small and medium enterprise that "annual finances are useless in the beginning because business is changing so frequently. Investors will want to see on a month-on-month basis what's happening."
Investors typically want financial transparency to understand the health of the business. Like Sam, they usually ask for a monthly update using consistent growth metrics. But it's a bonus if the investors are aware of what's happening in the business' bank accounts as well.
A business could have sold to a client and earned $200,000, for example, but they might not be receiving the payment another 90 days. This kind of information helps everyone involved make better decisions.
Tools like Xero are extremely useful in this case because it provides real-time insight into a business' cash flow. Especially since cash flow management is one of the top issues for small and medium businesses, this sort of transparency is essential to grow and scale.
By making accounting easy, we empower business owners to focus on scaling and doing purposeful business. Call Collins Hume in Ballina or Byron Bay on 02 6686 3000 today.