The Details That Decide | Part 3: The Deadline Is Not a Plan

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There is a point in a company's life when it stops being a startup and starts becoming an institution. Nobody rings a bell. It shows up as revenue that finally matters, a team that no longer fits around one table and, sooner or later, a larger investor, a growth fund or a PE firm asking for a data room.

That is the moment the paperwork starts speaking for you. A diligence team meets your AGM minutes, your audited financials, your Directors' Report and your related party records long before it gets to know your ambition. Where those are in order, the process moves. Where they are not, every gap becomes a question, every question becomes a delay and delays at that stage tend to cost more than the fix ever would have.

I write this from the investor side of the table, but also as someone who spent nearly three decades in audit and advisory rooms watching companies meet exactly at this moment. These notes are about building a company that can be examined by anyone, at short notice, without flinching, not about keeping any one investor comfortable. Part 2 covered the six months after the wire. This one looks further out, at the habits that carry a company from early traction to institutional scale.

An AGM on the last day is a verdict on the six months since the year closed. The books close on 31 March; the law gives six months from there, and that is the whole runway. Most of the AGMs I tracked this year landed in its final days. The timing alone isn't the sin, it leaves no buffer for anything to go wrong, and something usually does. A company on a compliance calendar knows its dates in April. One that waits for nudges from its investors' compliance teams finds out in September, usually with days to spare: the run chase left to the last over, possible, but one dropped catch decides it. On the day, I heard several explanations for the delay, and most of them named the auditor. Whatever the reason, that conversation was due in July or August, not on 30 September. Audit readiness is the company's job.

Pushed to the last day, due process is the first thing to go. Notice shortened, approvals taken after the fact. Each skipped step looks harmless on its own; together they say the process was running on hope.

Errors in the financials and the Directors' Report often mean nobody on the company's side read them. More than one draft reached me with figures in the Directors' Report that didn't match the financial statements and no one had caught it. In most cases the drafts are prepared by the auditors and an outsourced company secretary, and the promoters rely on them blindly. Outsourcing the preparation does not outsource the responsibility. A founder doesn't need to become an accountant, but does need a second pair of eyes on what lands on the desk: someone who checks the draft against the MIS and last year's numbers, and a simple checklist for the Directors' Report. When an error still makes it through, the signature was treated as a formality. The signature outlives the excuse.

The MIS and the statutory numbers should tell the same story twice. Part 2 was about building the MIS template in month one. The test comes at year-end: does the audited result reconcile to what the monthly reports said, and can management explain the difference without a scramble? A timely MIS makes the annual accounts easier. A reconciliation that is transparent, rather than reconstructed, tells an investor that nothing is being reshaped in the retelling.

Use your investor’s experience, and track what you have agreed. An investor has seen the same affirmative vote, approval or reporting deadline play out across many companies, and a founder who asks early gets the benefit of that pattern. The founders who handle this well keep an owned tracker, report ahead of the date rather than after a reminder, and know what their own investors must report upward so they can deliver it unprompted. That is the track record a future investor's counsel reads in the cap table and the shareholder agreements.

Related party dealings and conflicts of interest are the first thing a late-stage investor reads, and the last thing a founder documents. A loan from a founder, rent paid to a relative's property, a family member engaged as a consultant, a director's other company as a vendor. None of these is wrong by itself. What hurts is that they were never approved, never priced at arm's length, or never properly disclosed in the financials. The question to ask is whether there is a maintained list of related parties and an annual conflict declaration, or whether it gets reconstructed when someone asks. This is Part 1's friends and family point, grown up.

If there is one point in this piece to keep in mind, it is this one. A late filing is a lapse. A related party dealing that was never approved or never disclosed is a question about trust, and it is the one that makes a new investor re-read everything else.

Internal controls don't wait for internal audits to become mandatory. A legal threshold is a floor, not a starting gun. Long before a company needs a formal internal audit, it can have a payment approval matrix, monthly bank reconciliation, someone other than the approver releasing payments, and a short self-review before year-end. None of it is expensive. All of it is what an auditor, and later an investor, quietly checks for. Some founders worked this out early and brought in an internal audit before anyone required it, and it shows.

ESOP paperwork is diligence waiting to happen. An ESOP pool increase approved by the board but never taken to shareholders, a vesting schedule that lives in a spreadsheet nobody reconciles against the cap table, a non-resident employee's shares exercised without the FEMA pricing certificate. None of this shows up in the ordinary course of business. It shows up the day a diligence team asks for the ESOP register and it doesn't tie to the cap table. The question to ask is whether the scheme document, the pool approvals and the vesting tracker are current and reconciled, or whether they get rebuilt when someone finally asks.

Every one of these ends up in the file the next investor reads, for better or worse. Poorly drafted financials, an incomplete Directors' Report, gaps in the ESOP paperwork, skipped process and weak basic checks become flags a new investor's counsel finds in the first week. Fresh capital rarely announces why it walked away. It just gets quieter, and then it's gone.

None of this, on its own, decides anything. Not a late AGM, not a missing AVM approval, not an error in a schedule. What decides it is whether the discipline became a habit as the company grew or lasted only as long as someone was watching. Founders who build formal structures early are doing it so that when the right investor arrives, the only thing left to discuss is the business.

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_{ABOUT THE AUTHOR}

_{Burzin Dubash is Chief Operating Officer & Chief Financial Officer at Ankur Capital, an early stage venture capital firm investing in deep science and digital technologies, where he leads fund operations, finance, compliance, risk, and governance across the firm's SEBI registered funds. Before Ankur Capital, he spent nearly three decades in professional services, including as a Partner in Big Four risk advisory, and as a co-founder of Axis Risk Consulting. He currently serves on the Executive Committee of the AIF CFO Association and recently completed his term as President of the Institute of Internal Auditors, India. This series draws on that background to share field notes on the details that quietly shape how founders, investors, and LPs are read by one another.}