Do I need to get my financial statements and projections audited before going out to raise money? We have sold about $26,000 worth of our line of dog treats for older dogs at local markets and have been getting repeat orders online. We need funding to increase inventory so we can sell to retail stores.
No. Investors in seed and early stage businesses don’t require an audit of a company’s actual financial results. But, they do expect that the company’s financial statements be prepared on an accrual basis rather than cash basis. They also don’t expect you to get a sign-off from auditors on your financial projections of likely future results.
Fortunately, investors know that audits are very expensive and time-consuming for a young company’s management team. They want their funds to go to initiatives that boost sales rather than administration.