Why is this Important?: You will need funding to take the company through the first launch of your product/service and leave sufficient time to raise additional funding
Key Actions | Things to Consider | Tool Kit |
---|---|---|
Be sure you are ready to approach investors | A pitch with obvious flaws can sink a venture
Ask investors who turn you down for feedback and other investor referrals; listen intently It may be possible, but do not assume that you can again approach investors who have previously turned you down; ask if it would be okay to keep them updated |
|
Identify potential investors
Non-Dilutive Funding: Government grants, etc. |
What companies are currently in a venture capital fund’s portfolio?
Network with other CEOs ➔ ask for introductions from those investors you know & trust Do they invest in companies at similar stages & raising similar amounts of money ($2M vs $200M)? |
WA Investor Database
LSWI SBIR Grant Writing Program
|
Get legal advice as to requirements, needs, and restrictions for an offering | Is writing an offering memorandum necessary?
Pay attention to public disclosure rules |
|
Educate yourself on general terms and instruments used in early stage funding | Understand common financing terms (i.e. pre-money valuation) and those used in term sheets
Study various financing vehicles (Notes, Equity) and understand their benefits and drawbacks.
|
Financial Terms Definitions |
Put together a budget that will get you through Initial Launch and to Series A financing | Try to be a virtual company as long as possible
Only spend money on things that create value
|
Startup Financials Template
|
Develop a 10 minute investor pitch(es) | What type of investors are you pitching to?
Should contain all elements of the Business Plan Your goal for the first meeting is to be invited to a second meeting |
Pitch Deck Template |
Practice investor pitch(es) | Rehearse and then rehearse again
Anticipate questions and prepare backup slides with answers |
LSWI Pitch Coaching and Consulting |
Raise enough money to get to the next logical fundable milestone and investment round | Don’t try to raise money before you firmly understand your final value proposition
Put a realistic valuation on the company; Don’t be too valuation sensitive Ask investors who turn you down for feedback and other investor referrals; listen intently It may be possible, but do not assume that you can again approach investors who have previously turned you down; ask if it would be okay to keep them updated Take money when it is offered and, if possible, take more than you think you need.
Choose investors not just for their money but also how they can help you build the business |
Term Sheet Template (AOA) |