By Shawn Elliott, CFO at High Rock Accounting
Yep, here we go. A founder I was recently talking with had a beautiful Series A pitch deck. Twelve clean slides, sharp science, a credible team, and a real path to an IND filing. The lead VC was warm. Term sheet looked imminent. Then the diligence team asked for the monthly investor dashboard and last six months of financials. What they got back was a Mercury balance screenshot, a Google Sheet someone had cobbled together the night before, and an outdated runway number that had been auto-generated by a tool nobody had reconciled to the actual general ledger. The deal didn’t die outright. It got re-traded. The valuation came down by about $4M and the round closed three months later than it should have, which meant the founder burned through cash that was supposed to fund their first patient enrollment.
That story is more common than you’d think. In 2024, biotech and healthcare startups pulled in around $5.6 billion across 110 Series A rounds in the US, accounting for 53% of all Series A funding*1. The capital is there. What’s also there is a much more selective investor pool. Average biotech venture deal size hit a record high of about $67 million in 2025, but the number of rounds exceeding $100 million dropped from 104 in 2024 to 80 in 2025*2. Translation: the bar to clear has gone up. Investors are writing fewer, bigger checks, and they’re doing deeper due diligence before they wire funds. Your dashboard is no longer a vanity exercise. It is the document your lead VC opens every month to decide whether they’re going to lead your next round, follow on, or quietly let you raise from someone else.
All right. Let me walk you through what your Series A dashboard actually needs to look like for a healthcare, biotech, pharma, pharmacy, or health tech company. I’ve sat on both sides of this table. I spent five and a half years at Avella Specialty Pharmacy and another five years at Integrity Rx Specialty Pharmacy, both of which scaled to $50M-plus and exited to private equity. I’ve prepared the investor packages, sat in the diligence calls, and watched what does and doesn’t fly with sophisticated capital. Here’s what I’ve learned.
Why a Bad Dashboard Kills the Round Before You Even Get to the Term Sheet
Healthcare and life sciences VCs are different animals than your generalist tech investor. They’re patient, they understand long development timelines, and they’ve seen plenty of preclinical companies blow through capital before the science was ready. That patience cuts both ways. Because they know how easy it is to burn $20M and have nothing to show for it, they’re hyper-vigilant about how you’re spending the dollars they’ve already given you. They don’t just want to know your runway. They want to know your runway tied to a specific milestone, with the burn properly categorized between R&D, clinical, regulatory, G&A, and commercial.
Median Series A pre-money valuations in healthcare were sitting around $49 million in early 2025*3, but that number is hiding a lot of variance. The companies getting clean term sheets at the top of that range have one thing in common. Their books are squeaky clean, their dashboard ties out to the penny, and the founder can answer any question the partner throws at them in the diligence call without scrambling. The ones getting re-traded or stalled out share a different pattern. They have great science, sloppy financials, and a dashboard that raises more questions than it answers.
So let’s get into the mechanics.
The Five Sections Every Series A Healthcare Investor Actually Reads
1. Cash Position and Runway, Tied to Real Milestones
This is the first thing your investor opens. They want to know two numbers. How much cash do you have right now, and how long does it last. Sounds simple. It almost never is.
First, the cash number on your dashboard needs to tie to your reconciled bank balance, your general ledger, and your monthly close. Not a Mercury or Brex screenshot. Not an auto-pulled number from a tool that’s averaging your last three months of expenses on a cash basis. I had a client who was using one of these online runway tools, and the runway number kept moving on them. One morning it said September. The next morning it said November. Nothing had changed in their actual operations. The tool was just using a 3-month rolling average and a journal entry hadn’t posted yet for their international contractors. That’s a 60-day swing in runway based on noise. If your investor catches that during diligence, you’ve just handed them a reason to question every other number you’ve shown them.
Second, your runway needs to be overlaid against your actual milestones. For pre-revenue biotech, that means tying runway to IND-enabling studies, IND filing, first patient dosed, interim readout, and so on. For a medical device company, it’s bench testing, animal studies, IDE submission, and pivotal trial enrollment. For a pharmacy or health tech company with revenue, it’s tied to logo count, contracted patient volume, and payer contract milestones. Phase I trials in the US run roughly $1.4M to $6.6M, Phase II runs $7M to $19.6M, and Phase III runs $11.5M to $52.9M depending on therapeutic area*4. Median per-patient cost for pivotal trials sits around $41,400*5. Those are big, lumpy numbers. Your dashboard has to show your investor that you’ve thought through how the cash you have today funds the milestones you’ve committed to hitting, with realistic contingency built in. Industry best practice is to allocate 10% to 15% of clinical trial budget as contingency, with 15% to 20% recommended for early-phase trials*6.
In that type of scenario, what your investor wants to see is a clean three-section view: current cash on hand, monthly net burn for the trailing six months, and projected runway with a milestone overlay. If the runway gets you to your IND but not through your Phase I readout, say that explicitly. Investors hate surprises. They love being told the truth.
2. Burn Rate, Properly Categorized Between R&D, Clinical, Regulatory, G&A, and Commercial
Your investor doesn’t just want to know that you burned $850,000 last month. They want to know where it went. A common mistake I see in healthcare startup books is everything getting lumped into a generic Operating Expenses bucket on the P&L. That tells your VC nothing useful and forces them to ask follow-up questions you should have answered up front.
The right approach is to build out your chart of accounts so that every dollar gets tagged to a function. Research and development gets its own group, broken down further between preclinical, clinical operations, manufacturing and CMC, and regulatory affairs. General and administrative gets its own group. If you have a commercial team building out market access or payer contracting, that gets its own group too. Compensation gets allocated across these functions based on actual time spent, not a flat percentage you made up. This isn’t just for your investor. It’s also setting you up for proper R&D capitalization treatment under ASC 730 and getting your books audit-ready when the time comes.
I had a medical device client come to me with their books a complete mess. Everything was sitting in a single Operating Expenses account. They were trying to raise a follow-on, and the lead investor wanted to see what percentage of capital was going into the science versus overhead. We had to spend two weeks reconstructing nine months of expenses across the proper R&D, clinical, regulatory, and G&A buckets. The cost to redo it was about $18,000 in fractional CFO and bookkeeping work, plus three weeks of delay on their raise. If they’d set the chart of accounts up right at the front end, the whole exercise would have been a five-minute pull from Xero or Sage Intacct.
3. Clinical and Regulatory Milestones (Pre-Revenue) or Operational KPIs (Revenue-Generating)
This is where your dashboard differentiates itself from a generic startup investor update. A healthcare investor wants the same financials any VC wants, but they also want a layer that’s specific to your business model.
If you’re pre-revenue biotech or pharma, this section covers your IND timeline, current site activations, target enrollment versus actual enrollment, screen failure rate, dropout rate, and any FDA correspondence or upcoming meetings. For a medical device company, it’s bench testing completion, animal study readouts, IDE filing status, and clinical site recruitment. For a specialty pharmacy, it’s licensed states, payer contracts signed, prescriber base, average revenue per prescription, and prior authorization turnaround time. For a health tech or digital health company with revenue, it’s contracted patient lives, monthly active users on the platform, claims processed, denial rates, days in accounts receivable, and net patient revenue per encounter.
The point isn’t to throw 30 KPIs on a slide. The point is to pick the five to seven metrics that actually drive your business, and report them every single month with the same definitions. I had a client who kept changing how they defined their primary KPI between board meetings. The investors flagged it almost immediately. It looked like the founder was either confused about their own business or trying to massage the numbers. Neither is a good look in front of someone who’s about to write a check.
4. Revenue Recognition Done Right (When You Have Revenue)
All right. This is where I see healthcare and pharmacy companies get themselves into the most trouble, especially the ones with mixed revenue streams. If you have any revenue, the way you recognize it under ASC 606 has to be airtight. If you don’t, you will get re-traded at your next round when a buyer or lead investor’s accounting team finds the issue during quality of earnings work.
Two specific things I see constantly in this space. First, grant income belongs in Other Income, not in Revenue. Non-dilutive grants from NIH, BARDA, or state programs are not customer revenue. Mixing them in inflates your top line and makes your gross margin look better than it is. Sophisticated investors will catch this in the first 10 minutes of diligence and quietly mark down their valuation. Second, milestone-based contracts (a common feature of pharma partnership deals and BD agreements) need to be carefully evaluated for performance obligations under ASC 606. You can’t just recognize the milestone payment when you receive the cash. You need to determine whether it’s tied to a distinct performance obligation, whether it’s variable consideration, and whether the constraint on variable consideration applies.
For a clinical-stage company, the trial expense side has its own rules. Per-patient costs typically get pro-rated over the patient’s time in the study. Milestone-based payments to your CRO get accrued when the milestone is hit, not when the invoice arrives 60 days later. Manufacturing of clinical trial material has to be expensed when it’s used, not when it’s produced, unless you have a clear path to commercial inventory. Get this wrong, and your clinical R&D expense profile looks lumpy and unpredictable, which is a giant red flag for an investor trying to forecast your future burn.
5. Budget vs. Actual With a Reforecast Each Quarter
Your investor wrote a check based on a financial model. Every month, your dashboard needs to show how reality is tracking against that model. Side by side. Budget, actual, variance, percentage variance, and a one-line plain-English explanation for any line item with more than 10% variance.
And every quarter, you reforecast. Not a redo of the whole model. A genuine, current-data-informed update of your runway projection based on what’s actually happening in the business. New trial site came online slower than expected. Hiring delayed by two months. Lab consumables came in 20% over budget because of a supplier issue. These are the kinds of things that should show up in your reforecast and your variance commentary. Your investor doesn’t expect you to hit the original model perfectly. They expect you to know exactly why you’re not hitting it and what you’re doing about it.
The Technical Mechanics: What Has to Be Right Underneath the Dashboard
None of the above works if your underlying books are a mess. The dashboard is the output. The plumbing matters more.
First, you need accrual-basis books that are GAAP-aligned. Cash basis is fine for the IRS on a tax return for a pre-revenue C-corp. It is not fine for an investor. The difference is enormous in this industry. Cash basis misses your prepaid CRO milestones, your accrued payroll, your clinical trial accruals, and your deferred grant income. I’ve seen pre-revenue biotech companies on cash basis books look healthy when in reality they had $400,000 in unrecorded clinical trial accruals sitting in their inbox. That’s the kind of surprise that ends a fundraise.
Second, every number on the dashboard ties back to the GL. If your investor pulls on any thread, they should be able to follow the breadcrumbs all the way down to the source document. We attach all support directly inside the system, whether it’s an invoice in Bill.com, a receipt in Ramp or Brex, a payroll register in Gusto or Paychex, or a clinical contract in your contract management system. When you’re going through diligence on a $15M raise, the ability to silver platter every supporting document inside of 24 hours is the difference between a smooth close and a 90-day mess.
Third, your tech stack matters. For most of my healthcare and biotech clients, the right starting stack is Xero or Sage Intacct for the GL, Brex or Ramp for cards and bill pay, Gusto or Paychex for payroll, Bill.com or Ramp Bill Pay for AP, and Concur or Expensify for travel and expense. Once you scale past about $10M in revenue or you take on serious payer contracting, you may need to add a more specialized platform on the revenue cycle side. The point is to pick tools that integrate cleanly with each other and with the GL. Disparate, disconnected tools are how you end up with reports that don’t reconcile.
Format: One PDF, Monthly, Two Pages of Commentary, Then the Numbers
Yep, here’s the part founders almost always overget complicated about. The format itself.
The dashboard your lead VC actually wants to read is one PDF, sent on the same day every month, with the same structure every time. Top of the document is a two-paragraph CEO commentary section. What went well, what didn’t, and what you need help on. Investors are operators. They want to be helpful, but they need to know where you’re stuck. The ask paragraph is where you tell them. Are you trying to get warm intros to potential CRO partners? Looking for a head of regulatory? Need a co-investor for a bridge? Put it in writing.
After the commentary comes cash and runway. Then burn by category. Then your milestones and KPIs. Then the financials, P&L and balance sheet, with budget versus actual. Then the reforecast if it’s a quarter-end month. Don’t bury the cash number on page seven. Don’t make your investor scroll through 40 slides of trial design before they find out how much money you have left. Lead with what they need to know.
The Mistakes I See Every Single Month
In no particular order, the recurring mistakes that hurt fundraises in this space:
Reporting from disparate sources that don’t reconcile. Your bank balance, your GL, your tools, and your dashboard all need to agree. If they don’t, fix the underlying mismatch before you send the report.
Cash basis revenue recognition for a company that should be on accrual GAAP. Tells your investor you’re not ready for the next stage.
Mixing grant income, milestone payments, partnership revenue, and product revenue all into a single Revenue line. Each of these has different accounting treatment under ASC 606, and they tell very different stories about the durability of your business.
Vanity metrics. Throwing 25 KPIs on a slide because you read somewhere that VCs love metrics. Pick five to seven that drive your business and report them religiously.
Skipping the variance commentary. The numbers themselves are half the value. The plain-English explanation of why is the other half.
Changing your KPI definitions month to month. If you decide net patient revenue means something different in March than it did in February, your investor will catch it and they will not be charmed.
Bringing It All Together
Here’s the bottom line on this whole nut. Healthcare and biotech VCs are not looking for a beautifully designed dashboard. They’re looking for a clean, honest, well-structured monthly readout that lets them sanity check your business in 10 minutes and walk into their Monday partner meeting able to defend why they led your round. Get the plumbing right underneath, pick the right metrics, format the document consistently, and send it on the same day every month. Do that for six months and you’ll find that your next round comes together a lot faster than the first one did.
If you’re getting ready to raise your Series A or you’re sitting in the middle of one and your dashboard isn’t where it needs to be, we should talk. At High Rock Accounting, we partner with healthcare, biotech, pharma, pharmacy, and health tech founders from pre-revenue all the way through their PE exit. We build the chart of accounts, run the monthly close, prepare the investor package, and attend your board meetings to walk your investors through the financials directly. We’re just a Slack message away when something comes up between meetings, which in this industry is most weeks.
A couple of easy ways to get on my calendar:
Hawaiian Shirt Friday Ask an Accountant Hour, Fridays at 10 AM Pacific. Open Zoom, no agenda, bring whatever question is keeping you up: https://us02web.zoom.us/j/88992505122?pwd=LdbL4NYxN2NNk5RanaHRVtrHgT43O9.1
Or grab 30 minutes on my calendar directly: https://meetings-na2.hubspot.com/shawn-elliott/30-minute-meeting
Sources
*1 Glasner, Joanna. “Health And Biotech Startups Now Get The Majority Of US Series A Funding.” Crunchbase News, May 24, 2024. https://news.crunchbase.com/venture/series-a-funding-trends-health-biotech-data/
*2 Ropes & Gray LLP. “From Volatility to Vitality: How 2025 Reset the Life Sciences Market and What’s Next for 2026.” March 12, 2026. Citing Stifel data. https://www.ropesgray.com/en/insights/alerts/2026/03/from-volatility-to-vitality-how-2025-reset-the-life-sciences-market-and-whats-next-for-2026
*3 Chen, Jenny, M.D. “Navigating 2025: What’s Ahead for Healthcare Venture Capital and Startups.” 3DHEALS, July 31, 2025. Citing Wilson Sonsini Entrepreneurs Report data. https://3dheals.com/navigating-2025-whats-ahead-for-healthcare-venture-capital-and-startups/
*4 Sertkaya, A., Wong, H.H., Jessup, A., and Beleche, T. “Key cost drivers of pharmaceutical clinical trials in the United States.” Clinical Trials, 2016. PubMed. https://pubmed.ncbi.nlm.nih.gov/26908540/
*5 Moore, Thomas J., et al. “Variation in the estimated costs of pivotal clinical benefit trials supporting the US approval of new therapeutic agents, 2015 to 2017: a cross-sectional study.” BMJ Open, 2020. https://pmc.ncbi.nlm.nih.gov/articles/PMC7295430/
*6 Abacum. “Clinical Trial Costing: Phase-By-Phase Budget Guide.” https://www.abacum.ai/blog/clinical-trial-costing
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