Even with your busy schedule its important to take enough time upfront to prepare for and plan your fundraise. Too many founders start taking fundraising meetings without developing a plan and preparing in advance. This almost always leads to missed opportunities, mediocre meetings and extended timelines. Ideally, you want to blitz your target market of investors simultaneously with a crisp narrative, generate interest, and get a term sheet from more than one investor. Soliciting multiple term sheets is the key to unlocking favorable terms and giving you leverage to pick the best possible partner for you and your business.
1. Timeline
- Start with a desired close date and work backwards. Rule of thumb is that a fundraise takes 3 to 4 months from start to finish. That does not include the prep work that should be done in advance. Here’s a rough timeline:
- 1st meetings - 14 days
- 2nd meetings -14 days
- Business due diligence - 30 days
- Partner meetings - 14 days
- Term Sheet negotiation/bringing in additional term sheets - 14 days
- Legal due diligence - 30 days
- Sign and wire - 3 to 7 days
2. Preparation
Before you take your first serious fundraise meeting, take time to prepare upfront. This will allow you to show consistent information at every step along the way and avoid delays in answering questions or providing backup materials which can come across as negative signals to investors through the process.
- Fundraising narrative
- Why are you raising capital now, how much, what do you need it for? All of your subsequent materials should support this narrative.
- Email intro summary for introductions to investors
- 3 to 5 bullets points and a link to a teaser deck that your existing investors and partners can share with prospective investors.
- Teaser deck
- Short deck that piques interest but is appropriate to share with folks that haven’t yet demonstrated any interest and have not signed an NDA. Assume your competitors will instantly receive this from friends.
- Pitch deck
- A full pitch deck to use during investor meetings, which can be shared in advance or live during pitch meetings. (Read our guide on creating a pitch that truly sells here)
- Financial model
- A financial model that shows what your business looks like at scale and what this new capital will allow you to achieve.
- Financial model explanation deck
- Explains each of the line items in your financial model to someone who is not already familiar with your business. Investors are busy and if they don’t understand quickly, it will impact their ability to get excited about your company.
- Data room
- This doesn’t have to be completed before you start your fundraise, but you should at least have a table of contents. This can require many hours of work from many members of your team, so it’s important to get ahead of long lead-time items.
- Investor update (optional)
- A great way to garner interest from prospective investors is to have your existing investors share your latest investor update email. This email of course should be crafted for the purpose of getting a new investor excited, but it should look like one of your regular investor updates.
References
Creating a pitch deck that truly sellsSign up here to apply for a coaching engagement with Hilltop.