The following is a guest post by Diya Sagar, Chief Financial Officer of AWA Studios. The views expressed herein are solely those of the author.

Before becoming a CFO, my career was largely outside of corporate finance functions: as an investment banker, I analyzed company financials and advised CFOs on strategic capital allocation; as a head of corporate development and strategy, I allocated capital to CFOs of multiple competing operating companies; as an investor, I invested in companies and held CFOs accountable for performance at the board level. Regrettably, there has always been a significant expectation gap between the providers of capital (investors) and the recipients of capital (companies). Now, sitting on the other side of the board table as an operator, I reflect on the key pitfalls I have observed and how finance leaders should bridge this divide.

Never make promises you know you cannot keep

During my time as an investor, I reviewed hundreds of company roadshow decks. Unsurprisingly, most showcased towering revenue projections and, for companies not yet profitable, a clear path to breakeven. While it is natural to present an attractive financial profile to attract investment, the numbers you present carry serious downstream implications.

Investors interpret your projections as an implicit commitment to investment—that your company will achieve the revenue and cash flow levels you stated within the timeline you stated. Both the numbers and the timeline are critical factors in an investor's decision: if the company falls behind on either dimension, or both, you will not achieve the rate of return they required when they initially invested. It is like buying a house in a run-down neighborhood, being told it will be gentrified within five years, but in reality, there is no improvement, or you are told it will take ten years. Would you have bought the house in the first place?

To be clear, I am not asserting that all companies that miss their targets are failed investments, nor that all investors have the same financial motivations. But if you want to secure other people's money, think twice before making any promises.

What you take from others, you must repay in kind

Achieving investment liquidity is just as important as making the investment decision. Generally, investors plan to exit the company after several years, with the expectation of receiving more cash than their original investment, often several times more. Securing financing for your company is exciting, but what truly matters is how you deploy that cash.

The core driver of any business-driven enterprise should be building equity value. For every dollar the company spends, its impact on business value should be considered: is that new marketing campaign truly growing the brand in a quantifiable way beyond its cost? Does the business expansion support opportunities that are monetizable and incremental to profit? Similarly, achieving efficiency gains that allow the company to do the same with less is value-accretive; but if it undermines growth, it can be destructive.

Time is also critical. Assuming two companies deploy the same cash, a company that doubles its equity value in three years is far more attractive to investors than one that takes five years. Moreover, the more capital you take, the harder you need to work to create value. In short, other people's money is not free.

If you cannot protect risk capital, there is no return

Ask any investor about their portfolio, and they will proudly mention the successful companies. For obvious reasons, no investor wants to talk about the companies that convinced them of their value, accepted their capital, and then burned through the funds without building the promised business. And that is precisely the point.

When a company receives investment, the investor is betting their capital on you. They expect you to prove that their investment decision was correct compared to other companies available at the time. But what if the business does not go as planned? It is in these critical moments that I have seen some companies emerge as winners even in the most challenging environments. Companies that recognize their primary duty is to protect investor capital can quickly implement operational changes to pursue this single goal.

First, communicate months before any crisis scenario arises, showing that you are trying to address issues ahead of time, even if the problem is still on the horizon. Second, maintaining transparency throughout the year—not just during board meetings—helps build trust with the board and investors. Third, offering alternative plans that can be quickly implemented within the company brings the board into the decision-making process at the most critical moments.

Last-minute surprises not only show a lack of respect for these relationships but can also reduce the chances of securing future investment. By then, no amount of excuses will convince anyone that betting on you was the right call. As CFOs, it is our responsibility to get this formula right.