By the time a food or beverage brand is ready for a Series A, the story is usually strong: a product people love, early retail wins and a big market. What slows rounds down, or kills them, is often the finance work underneath. Diligence teams find revenue that isn't really net revenue, margins that don't hold up, or a model nobody can explain.
The good news is that most of these problems can be fixed in a few months, if you start early. Here's the checklist I work through with brands preparing to raise.
1. Financial statements investors can rely on
- Accrual-basis, GAAP-consistent books. Cash-basis bookkeeping doesn't show the true picture of a business with inventory, receivables and trade programs.
- A monthly close that finishes on time. Aim to close within 15 days of month end, with statements that don't change after they're delivered.
- Reconciled balance sheet. Cash, receivables, inventory, payables and accrued liabilities should all tie to support every month.
- Outside accountant involvement. Depending on the investor, reviewed or audited statements may be requested. Ask early, because an audit takes time to arrange.
2. Revenue that's really net revenue
Food and beverage brands pay customers in many ways: slotting, promotions, free fills, distributor programs and deductions. Under ASC 606, most of these reduce revenue rather than counting as marketing expense. Investors will restate your revenue if you haven't, and a restated number in the middle of diligence hurts credibility.
- Report gross sales, trade spend and net revenue separately.
- Track trade spend by customer and program.
- Reconcile deductions monthly and know what's outstanding.
3. Unit economics by SKU and channel
Investors want to know whether each case you sell makes money, and whether that gets better with scale.
- A landed cost per case for every SKU, including freight, yield loss and storage, not just the co-packer quote.
- Gross margin by SKU, customer and channel (retail, distributor, e-commerce, food service).
- A clear view of how margins improve with volume, pricing or a production change, and what has to be true for that to happen.
4. Proof of velocity, not just distribution
Getting on shelves is the start; selling through is the proof. Be ready to show:
- Sales velocity per store per week, from retailer or syndicated data (SPINS, Circana or NielsenIQ, where available).
- Repeat purchase and retention data for e-commerce customers.
- Same-store growth separated from growth driven by adding new doors.
- Trade spend per unit sold, to show the growth isn't simply bought with promotions.
5. A financial model you can defend
- An integrated three-statement model: income statement, balance sheet and cash flow, linked together.
- Monthly projections for 24–36 months, built from drivers like doors, velocity, price and cost per case.
- Working capital modeled realistically, since inventory and receivables grow with sales.
- A downside case that shows how long the cash lasts if growth comes in slower.
- A use-of-funds plan that ties the raise to specific milestones.
Know your cash runway, and leave margin. Raises often take longer than planned. Start the process with enough cash to last well beyond your target closing date, so you're not negotiating from a position of urgency.
6. Clean legal and ownership records
- An up-to-date cap table that reconciles to signed documents, including options, SAFEs and convertible notes.
- Executed agreements with co-packers, key suppliers, distributors and major retailers.
- Trademarks registered and owned by the company.
- Food safety certifications and recall procedures documented.
7. An organized data room
Build the data room before investors ask for it. A well-organized data room signals a well-run company and speeds up diligence. At a minimum, include:
- Monthly financial statements for the last two to three years, plus year to date.
- The financial model and its key assumptions.
- Sales and velocity data by customer and SKU.
- Cost per case and margin analysis.
- The cap table and corporate documents.
- Major contracts, including co-packing, distribution and leases.
- Tax returns and any outstanding liabilities or disputes.
8. Board and investor reporting
Show investors how you'll report to them after the round. A simple monthly package with financial statements, KPIs, cash runway and a short commentary demonstrates the discipline they're looking for.
Start three to six months ahead
Most brands underestimate how long it takes to clean up books, restate trade spend, build a credible model and assemble a data room. Starting three to six months before you plan to raise gives you time to fix issues privately, instead of explaining them during diligence.
Planning a raise in the next year?
I help food and beverage brands get investor-ready: clean financials, a defensible model and a data room that stands up to diligence. Start with a 30-minute call.
Schedule an introductory call