Prevalence of Equity Financings with Audited Financial Requirements
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Our data from Aumni Market Insights on equity financings from 2015 to 2024 shows the prevalence of audited financial requirements consistently declining for early-stage companies over the past decade. In general, and perhaps as expected, the prevalence of portfolio company audit requirements increases with stage — ~90% of Series D and later startups have an audit requirement in their equity financing agreements.
For Series Seed financings, the prevalence of audit requirements has steadily decreased, starting at 45% in 2015, lowering to 39% in 2020, and dropping to 28% in 2024.
Series A financings show a similar downward trend, though at a higher starting point. In 2015, 65% of Series A financings included audit requirements, but this figure fell to 57% by 2020 and then to 50% in 2024.
In later-stage financings, audit requirements for Series C and Series D+ have remained consistently high over the past decade, reflecting strong investor expectations for financial transparency at the stages. For Series C, audit requirements were 80% in 2015, rose to 81% in 2020, and remain high at 78% in 2024. Series D+ similarly began high at 90% in 2015 and remained steady at 89% in both 2020 and 2024.
Regardless of whether a fund mandates audited financials for its portfolio companies, Aumni is here to help investors obtain the financial insights they need to make informed decisions.
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