Equity Fund Raise · Question

How do investors check the numbers I share during due diligence?

Short answer

Investors test your numbers by tying them to independent evidence: audited statements, tax filings, GST data, bank statements, customer contracts, stock and asset checks, and conversations with customers or suppliers. They look for consistency across sources and for explanations of any gap. Figures that cannot be traced to a record are discounted or questioned, however convincing the presentation.

In more detail

Due diligence is a structured check run by the investor and its advisers, usually financial, tax, legal and commercial. The aim is to confirm that what you told them is true and to find what you did not mention.

Financial checkers start with reported profit and trace it down to cash. They compare sales in the accounts with GST returns and bank credits, and look for receivables that are old or disputed. Closing stock is tested against records and, where useful, physical counts. Costs are matched to supplier invoices and payments. Related-party transactions get special attention because they can distort margins.

Tax and legal reviewers examine returns, notices, pending cases, licences, property titles and contracts. Commercial reviewers speak to customers and test whether orders and relationships look as described.

Problems that tend to surface:

Different figures for the same item in the deck, the accounts and the data room.
Cash transactions or personal expenses mixed into business accounts.
Revenue that is booked before it is truly earned.
Dependence on one customer that was not disclosed.
Old liabilities or disputes that appear late in the process.

Prepare by cleaning your books before you approach investors, organising documents in an index, and writing short explanations for anything unusual. Disclose weak points early. A problem you raise yourself is a discussion; one the investor discovers is a question of trust and often changes the price or ends the talks.

Reconcile first

Before sharing anything, reconcile sales across accounts, GST returns and bank statements. Resolving a difference yourself is far easier than explaining it in a diligence call.

Key points

Investors verify numbers against tax filings, GST data, bank flows and contracts.
Consistency across documents matters as much as the figures themselves.
Stock, receivables and related-party dealings get close scrutiny.
Early, voluntary disclosure of weak points protects trust and negotiations.
Clean books and an indexed document set shorten the process.

Who this applies to

Promoters preparing to open their records to an investor.
Finance heads responsible for reconciling data before diligence.
Owners who run cash-heavy or family-intertwined businesses.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.