The FC’s Role in Fundraising and Due Diligence

A fundraising or a sale process is one of the most demanding and consequential events a business goes through, and the Financial Controller sits close to the centre of it. When a company raises equity or debt, or when it is sold, the financial information is subjected to a level of scrutiny it rarely faces at any other time, and the quality, reliability and presentation of that information directly affects whether the transaction succeeds and on what terms. The Financial Controller is the person who owns much of that information and who does much of the work of preparing it for, and defending it through, the due diligence that any serious transaction involves.

This guide is written for Financial Controllers who are involved in, or preparing for, a fundraising or sale process. It covers the Financial Controller’s role in such a process, what due diligence actually demands, how to prepare the business and the financial information for scrutiny, the practical realities of running a process alongside the day job, and how a Financial Controller can add real value to a transaction rather than merely surviving it. Transaction experience is one of the most career-enhancing things a Financial Controller can acquire, and understanding the role properly is the first step to performing it well.

Why Transactions Put the Finance Function Under Scrutiny

In a fundraising or sale, an investor or acquirer is being asked to commit significant capital on the basis of the business’s financial position and prospects, and they will verify the financial information thoroughly before doing so. This verification — financial due diligence — examines the historical financial performance, the quality of earnings, the working capital position, the forecasts, the accounting policies, the controls, and anything else that bears on the value and risk of the business. It is conducted by experienced advisers whose job is to find the problems, and it is searching in a way that routine reporting and even the annual audit are not.

This scrutiny falls heavily on the finance function, because the finance function produced the information being examined. The Financial Controller is the person who can explain the numbers, produce the supporting detail, justify the accounting treatments, and address the questions and challenges that due diligence raises. The quality of the finance function’s work, accumulated over the years before the transaction, largely determines how the due diligence goes: a business with clean, well-controlled, well-documented financial information sails through far more smoothly than one whose numbers are messy, whose controls are weak, and whose accounting cannot withstand examination. In this sense the due diligence tests not just the numbers but the Financial Controller’s stewardship of them.

What Due Diligence Actually Demands

Financial due diligence demands, above all, that the financial information be reliable and explicable. The acquirer’s advisers will want to understand the quality of earnings — whether the reported profit is sustainable and recurring or flattered by one-offs, accounting choices or timing. They will examine the working capital position and its normal level, which directly affects the price in most transactions. They will scrutinise the forecasts and the assumptions behind them. They will test the accounting policies for appropriateness and consistency. And they will probe the controls and the reliability of the financial reporting process itself.

Meeting these demands requires the Financial Controller to produce a great deal of detailed financial information, quickly and accurately, while continuing to run the business’s normal finance operation. The information must tie together, withstand challenge, and be supported by evidence. Inconsistencies, unexplained items and numbers that cannot be substantiated are precisely what due diligence is designed to find, and each one erodes the acquirer’s confidence and strengthens their hand on price. The Financial Controller who can produce clean, consistent, well-supported information under the pressure of a live process is providing exactly what the transaction needs, and it rests heavily on the quality of the underlying financial records and controls.

Preparing the Business for Scrutiny

The best time to prepare for due diligence is well before the process begins, and a Financial Controller who anticipates a future transaction can do a great deal to make it go well. This means ensuring the financial records are clean and the reconciliations current, the accounting policies are sound and consistently applied, the controls are robust, and the financial information is well-documented and explicable. It means addressing the known issues — the messy account, the questionable treatment, the unreconciled balance — before an adviser finds them, because a problem discovered by your own side and resolved is far less damaging than the same problem discovered by the other side’s advisers mid-process.

Where a transaction is anticipated, vendor due diligence — commissioning the financial examination from your own side in advance — can surface and address the issues before the buyer’s advisers see them, and present the business’s financial position in a clear, credible, pre-validated form. Even without formal vendor due diligence, the Financial Controller who gets the financial house in order ahead of a process — clean records, current reconciliations, documented policies, robust controls, resolved issues — transforms how the due diligence goes. This preparation is largely the ordinary discipline of good controllership applied with a transaction in view, which is why a well-run finance function is itself an asset in a sale.

Running a Process Alongside the Day Job

One of the hardest practical realities of a transaction is that it lands on top of the normal work of the finance function rather than replacing it. The month-end close still has to happen, the reporting still has to be produced, the routine work still has to be done, all while the finance team is also responding to an intense and time-pressured flow of due diligence requests. This dual load is genuinely demanding, and managing it is part of the Financial Controller’s role in a process.

Managing it well requires planning and, often, additional resource. The Financial Controller should anticipate the load a process will impose and arrange support — whether additional internal capacity, interim help, or adviser support — rather than assuming the existing team can simply absorb it on top of everything else. Maintaining the integrity of the normal finance operation through the process matters, because a transaction does not pause the business, and the routine reporting and controls cannot be allowed to lapse while attention is on the deal. The Financial Controller who keeps both running — the deal and the day job — is doing one of the more demanding things the role requires, and recognising the need for additional resource is a sign of good judgement rather than weakness.

Adding Value, Not Just Surviving

The Financial Controller can approach a transaction as something to survive or as an opportunity to add real value, and the difference matters both for the transaction and for the Financial Controller’s own development. Adding value means more than producing the requested information: it means presenting the business’s financial story clearly and credibly, anticipating and addressing the concerns the acquirer will have, defending the value where it is justified, and being a trusted, capable presence that gives the other side confidence in the quality of the business. A finance function that handles due diligence impressively is itself a positive signal about the business, because it demonstrates the kind of competent stewardship that reduces the acquirer’s perceived risk.

For the Financial Controller personally, transaction experience is among the most valuable things they can acquire. Having led the financial workstream of a fundraising or a sale — having produced the information, managed the due diligence, defended the numbers and helped get the deal done — is exactly the kind of experience that distinguishes a Financial Controller in the market and that opens the path toward Finance Director and CFO roles. The connection between transaction experience and career progression is strong, as our guide on building a finance career in a PE-backed business explores. A Financial Controller who has been through a process well, and can talk about it credibly, has acquired something genuinely career-enhancing.

The Data Room and Information Management

A central practical element of any transaction is the data room — the organised repository of financial and other information made available to the investor or acquirer and their advisers for due diligence. The Financial Controller usually plays a major role in populating and managing the financial part of the data room, and how well this is done shapes the whole process. A well-organised data room with complete, clearly-labelled, consistent information signals a well-run business and makes the due diligence efficient. A disorganised one with gaps, inconsistencies and information that has to be repeatedly requested signals the opposite and slows everything down.

Managing the data room well requires anticipating what the other side will need and providing it in an organised form, maintaining version control so that everyone is working from the same numbers, and tracking the flow of requests and responses so that nothing is missed and the process keeps moving. It also requires judgement about disclosure — what to provide, when, and how — which is usually guided by the advisers but draws on the Financial Controller’s knowledge of the information. A Financial Controller who runs the financial side of a data room competently removes a great deal of friction from a process and reflects well on the business throughout.

Quality of Earnings: The Heart of Financial Due Diligence

If there is one concept at the centre of financial due diligence that the Financial Controller must understand, it is quality of earnings. The acquirer is not simply interested in the reported profit; they are interested in the sustainable, recurring, underlying earnings of the business, stripped of one-offs, accounting distortions and anything that flatters the headline figure without reflecting genuine ongoing performance. The quality of earnings analysis is where the acquirer’s advisers probe the reported profit hardest, looking for the adjustments that move the underlying number away from the reported one — and those adjustments often move the price.

The Financial Controller who understands quality of earnings can anticipate this analysis and prepare for it: identifying the one-offs and unusual items in advance, understanding how the accounting choices affect the reported profit, and being ready to explain and defend the underlying earnings rather than being surprised by the acquirer’s adjustments. A business that presents a clear, honest, well-supported picture of its sustainable earnings is in a far stronger position than one whose reported profit unravels under quality-of-earnings scrutiny. This is an area where the Financial Controller’s preparation directly affects the outcome of the transaction.

Working Capital and the Completion Mechanism

Working capital is one of the most commercially significant areas in most transactions, because the level of working capital the business carries directly affects the price through the completion mechanism. Acquirers typically expect the business to be delivered with a normal level of working capital, and the mechanism that adjusts the price for any difference between the actual working capital at completion and that normal level can move significant value. The Financial Controller is central to this, because finance owns the working capital and understands its normal level, its seasonality and its drivers.

Getting the working capital analysis right — establishing the genuine normal level, understanding the seasonal pattern, and being able to explain and defend the position — is one of the most financially consequential things the Financial Controller does in a transaction. A weak working capital analysis, or one the Financial Controller cannot defend, can cost the selling business real value at completion. A strong one, grounded in a genuine understanding of the business’s working capital dynamics, protects the value. This is a clear example of how the Financial Controller’s technical command of the numbers translates directly into transaction value, which is part of why transaction-experienced Financial Controllers are so valued.

Forecasts and the Equity Story

In a fundraising in particular, the forecasts are central, because an investor is buying the future of the business rather than its past, and the forecasts are the financial expression of that future. The Financial Controller is usually closely involved in preparing the forecasts that support the equity story, and their credibility is critical. Forecasts that are over-optimistic, poorly supported or internally inconsistent undermine the investor’s confidence in the whole proposition; forecasts that are realistic, well-grounded in the drivers of the business, and clearly connected to the historical performance support it. The investor’s advisers will scrutinise the forecasts hard, testing the assumptions and probing the build-up, and the Financial Controller must be able to explain and defend them.

The art is in forecasts that are ambitious enough to support the valuation the business seeks but credible enough to withstand scrutiny — a genuine tension that the Financial Controller helps to navigate. This requires forecasts that are built bottom-up from real drivers rather than imposed top-down from a desired answer, that connect clearly to the demonstrated historical performance, and that the Financial Controller genuinely believes and can defend. A Financial Controller who can produce and stand behind credible forecasts is providing something essential to a fundraising, because the forecasts are where the investment case is ultimately made or lost. This forecasting capability connects to the broader financial planning discipline that is central to the senior finance role.

After the Deal: Integration and Delivery

The Financial Controller’s role does not end when the transaction completes. After a fundraising, the business has new investors with expectations about reporting, governance and performance, and the finance function must meet them — often a step-change in the standard and frequency of reporting the business has been used to. After a sale, there is integration into the acquirer’s group, which can be a substantial undertaking involving the alignment of systems, policies, reporting and controls. In both cases the Financial Controller is central to delivering what the transaction promised, and the quality of that delivery shapes whether the deal is judged a success.

This post-completion phase is where the forecasts and commitments made during the process meet reality, and where the finance function’s ability to deliver against them is tested. A Financial Controller who has been through the process well is also well placed to lead this delivery, because they understand what was promised and to whom, and they have the relationships and the credibility built during the transaction. Recognising that the transaction is the beginning of a new phase rather than an end in itself — and being ready to deliver through it — is part of what distinguishes a Financial Controller who adds lasting value in a deal from one who merely gets it across the line. It is also where the experience compounds, because delivering on a transaction is exactly the track record that opens the path to more senior finance leadership.