With more than two decades of experience working alongside founders, investors and leadership teams, Simon Smith has seen first-hand the role finance plays in building and scaling successful businesses. As Founder and CEO of InfiniteCFO, he leads a team of more than 30 people providing finance as a service to high-growth businesses. InfiniteCFO works with founders, investors and CFOs across finance operations, transaction readiness and strategic finance, helping businesses gain the clarity and confidence to scale.
Q1. At what point should a CFO start preparing for a fundraise, and what should they be doing before investors are even approached?
Earlier than most founders think. If you start preparing when you need the money, you’re already late. We tell clients to allow six to twelve months before a round opens, and the first part of that usually has little to do with decks or data.
Often this starts with relationships. The best raises I've seen were with investors who had been following the company for a year or more. Share the story early, set out what you plan to achieve, then go back and show you’ve done it. In this case, by the time you ask for the money, the investor has watched you deliver against your own forecasts, and this is worth more than any pitch.
Alongside that, get the finance function in order. That means a reliable monthly close, management accounts the board uses, a three-statement model tied to your operating plan, and Unit Economics you can defend line by line. My advice is to build the data room now, while nobody’s asking for it so you are prepared for when they do.
The reason for doing this early is practical. A live fundraise is a second full-time job, and the business doesn’t stop while you run it. In my experience, founders who leave preparation late end up raising and firefighting at the same time, and the numbers usually suffer just when investors are looking hardest.
Q2. How do you determine how much capital to raise without either over-diluting shareholders or leaving the business underfunded?
My advice here is to always start from the investor’s side of the table. Investors fund milestones: the proof points that make the next round, or an exit, possible at a materially higher valuation. The real question is what you need to prove, and what it costs to prove it.
Map the milestones that move value at your stage (ARR thresholds, net revenue retention, payback on acquisition spend), cost the plan to hit them, then add a buffer for slippage. In the current market we’d plan for 18 to 24 months of runway rather than the 12 to 18 that used to be acceptable. Rounds take longer to close, and you don’t want to be raising from a position of need.
Then run the model in scenarios and if the downside case leaves you short before you’ve hit the milestones, you’re underfunded. If the upside case has you sitting on cash you can’t deploy sensibly, you’re probably giving away equity you don’t need to.
Don’t overlook non-dilutive sources either. R&D tax credits, grants and venture debt can all extend runway as non-dilutive sources of capital, and investors notice founders who’ve used them well. Every pound you don’t raise in equity is dilution you’ve avoided so alternative sources should also be considered and utalised.
Q3. What financial information do investors scrutinise most closely, and where do businesses commonly fall short?
Investors are presented with hundreds of opportunities a year and back a handful. Before anything else, ask yourself dispassionately why they’d pick you over the other 99 in their pipeline. If you can’t answer that in a couple of sentences, the numbers won’t save you. A clear, concise story and value proposition is the frame everything else hangs on.
Then they go to the Unit Economics, and this is where I see most businesses fall short. For SaaS that means CAC payback, gross margin, net revenue retention, cohort behaviour and LTV to CAC. Investors want to see each one calculated consistently, reconciled to the accounts and tracked over time, so they can judge whether growth is efficient or simply bought.
The common gaps are predictable. ARR that doesn’t reconcile to recognised revenue. Gross margin that leaves out hosting or customer success costs. CAC that excludes sales salaries. Churn reported as a blended figure that hides a weak cohort. None of these is fatal on its own, but each one prompts more diligence questions and chips away at trust.
The fix is to define your metrics once, document the methodology and report them the same way every month. When an investor can rebuild your numbers from the data room and get the same answer, the conversation moves on to growth.
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