Startup MIS report format: how to read one, with a sample

A monthly MIS is the closest thing to a pulse an early-stage company has. The signal sits lower than the top line.

Founders lead with revenue because it's the number that grows. You'll learn more from the lines under it: what was collected, what it cost to deliver, how long the cash lasts and how much of it depends on one client. Read those first. Revenue can wait.

An MIS is the monthly view of the checks in our guide to evaluating early-stage startups, especially client agreements and compliance. Once you've invested, it's often the only regular evidence you'll get between board meetings, so it pays to read it the same way every month.

What a startup MIS report should contain

A startup MIS report should hold the same 8 or so lines every month, each shown against plan and last month: revenue invoiced, revenue collected, gross margin, monthly burn, cash in the bank, runway, receivables and top-client share. Definitions belong at the foot of the page, fixed. If the format changes, ask why before you read anything else.

Plan beside actual matters more than it looks. In a survey of 885 venture capitalists, early-stage investors said only 26% of their companies met projections. The firms were mostly American and surveyed around 2016, and no Indian figure is published. But the point holds anywhere. A miss is normal. What the founder did after the miss is the finding. You can only see that if the plan sits on the same page.

Read it bottom up: an annotated sample

Read an MIS from the bottom up. Start with cash and runway, because they set how much time the company has. Then check collections against revenue, then margin, then how concentrated revenue is. Revenue growth comes last, once you know whether it's real cash, profitable and spread across clients.

Here's a Sample MIS for a fictional company, three months, in Rs lakh. The numbers are illustrative only.

Sample, Rs lakh	Jul	Aug	Sep
Revenue invoiced	40	46	52
Revenue collected	36	34	33
Gross margin	62%	58%	53%
Monthly burn	30	34	41
Cash in bank, month end	300	266	225
Top client, share of revenue	35%	41%	48%

1. Cash and runway

Cash fell from 300 to 225 while burn climbed to 41. At September's burn, that's about 5 months of runway, not the 10 that July's numbers suggested. Ask what drove the jump. A planned hire is fine. Drift isn't.

2. Collections against revenue

Here's the line the top line hides. Invoiced revenue rose 30% in two months, from 40 to 52. Collections fell every month, from 36 to 33. The gap is sitting in receivables. Somebody isn't paying, or the company is booking revenue before clients have agreed to it. Ask for the receivables ageing, by client.

3. Gross margin

Margin slid from 62% to 53% in a quarter. Discounts to win deals? A new delivery cost? Either can be fine. But growth bought with margin gets more expensive with every sale, so you want the reason in writing.

4. Concentration

One client went from 35% to 48% of revenue. Put that next to the collections gap and you've got your first question for the founder: is the client that's growing quickly also the one paying late? Then read its contract. You're looking for the payment terms, the exit clause and whether anything changes if the company is sold.

Revenue tells you the company is selling. Collections tell you anyone is paying for it.

How to check MIS numbers against filed records

An MIS is the founder's own report, so tie it to records the founder doesn't control: GST returns for revenue, bank statements for cash and the audited accounts filed with the Ministry of Corporate Affairs for the year. A quarterly spot check is enough for most early-stage companies. Before a follow-on cheque, do the full check.

• Revenue to GST: monthly filers must file Form GSTR-3B by the 20th of the following month, according to the GST portal's own guide. Ask for the returns and compare taxable value with invoiced revenue.
• Cash to the bank: month-end balances against bank statements, not a screenshot.
• Clients to contracts: the top 3 clients against signed agreements and invoices; our guide to verifying revenue and client contracts covers the method.
• Year to the accounts: twelve months of MIS should sum close to the audited figures. If they don't, ask which one is wrong.

Differences happen. Timing, credit notes, export invoices. What you're testing is whether the founder can explain them in one reply, without a week of silence first. If you get a clear answer, you've learned the finance function works. If you get a new spreadsheet, you've learned something else.

What to do with this next month

Send your portfolio founders one fixed format, with plan beside actual and definitions at the foot, and ask for it by the same date each month. Then read every MIS bottom up, write down two questions and keep the answers. Don't wait for the board meeting to ask them; a short email the week the MIS lands gets you a fresher answer, and it tells the founder you're actually reading. Twelve months of those notes will tell you more at the follow-on decision than any single board deck will.

At MyStartupValley, each startup is evaluated on six due diligence parameters, among them client agreements and compliance, with deal notes written by the MSV team. To review evaluated companies with sector and stage fit in your own dedicated workspace, see MSV Investors.

Questions

What should a startup MIS report include?

Revenue as invoiced and as collected, gross margin, monthly burn, cash in the bank, runway in months, receivables, headcount and the share of revenue from the top client, each against plan and last month. Ask for the same definitions every month, written at the foot of the report.

How do investors check a startup's MIS numbers?

Investors tie invoiced revenue to GST returns, cash to bank statements and annual totals to the audited accounts filed with the Ministry of Corporate Affairs. A quarterly spot check is enough for most early-stage companies, with a fuller check before a follow-on cheque.

What is a red flag in a startup MIS?

Revenue rising while collections fall, a sliding gross margin, one client's share growing month after month, or a metric whose definition quietly changes. Each can have an innocent reason, so ask the founder before deciding what it means, and note the answer.

Sources: GSTN, GST tutorial: Form GSTR-3B FAQs · Gompers, Gornall, Kaplan and Strebulaev, How Do Venture Capitalists Make Decisions?, NBER Working Paper 22587, 2016 (Journal of Financial Economics, 2020)