From 3 years of messy books to a clean exit

The situation

They were building something genuinely impressive: deep tech, based on decades of research, that was now a fully-fledged product turning heads and saving customers millions. What they didn't want to spend time on was the finance function. They had a "Fractional CFO" but the numbers seemed off. Revenue recognition was inconsistent. Intercompany transactions were a mess. Their cap table and their books told two different stories. They knew there were problems but they couldn't quite point to what they were, let alone how to fix it. And the knew they had to fix it fast when strategic acquirers starting calling.

What we found

Getting under the hood took about two weeks. What we found was a common pattern for startups at this stage: the company had grown faster than its financial infrastructure.

• Out-of-the-box chart of accounts that didn't split cost types effectively
• Cash-based vs accrual accounting
• Inconsistent categorization between COGS and operating expenses that made gross margin artificially fluctuate
• No depreciation schedules on equipment that had been on the books for two years
• Convertible notes with no accrued interest

The books weren't unfixable. They just needed someone who knew what they were doing.

What we did

We ran a full historical cleanup across all three years, rebuilt the chart of accounts from scratch, and transformed their books into GAAP-compliant three statement financials that their acquirer's diligence team could actually work with. We also built out the a forecast model they needed to answer the questions a deal team asks: projected growth, sales costs, and margins. The founder didn't have to explain what any number meant. The diligence team didn't have to ask twice.

The result

The acquisition closed. The acquirer's finance team told the founder the books were the cleanest they'd ever seen for a company of this size and stage.