SaaS · 🇺🇸 United States
Diligence questions the founder could not answer from the books
The metrics in the deck and the numbers in the ledger were produced by different processes, and they did not agree.
US startup, seed to Series A, 1,800 transactions/month. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
11 days
To a reconciled data room
3
Metric definitions corrected
1
Source of truth established
The situation
- The founder tracked ARR, churn and CAC in a spreadsheet built from the billing system, while the accountant produced financials from the ledger.
- Diligence asked for a reconciliation between the two and there was none.
What we found
- ARR in the deck included one-off implementation fees, which is not recurring revenue.
- Churn was calculated on logo count rather than revenue, understating the impact of losing larger accounts.
- CAC excluded founder time and contractor spend on marketing.
What we did
- Defined each metric explicitly and documented the definition alongside the number.
- Built the metrics from the ledger so financials and metrics reconcile by construction.
- Assembled a data room with the reconciliation between billing system, ledger and reported metrics.
The outcome
- The founder could answer diligence questions from a single reconciled source rather than defending two different sets of numbers.
- Corrected ARR was lower than the deck figure, which was better discovered internally than by an investor.
What we'd flag
Corrected metrics were less impressive than the originals. The deck had to be revised before it went out again.
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