Prepare for & Raise Sufficient Funds to get through Proof of Concept Stage

Why is this Important?: You will need funding to take the company through the proof of concept stage and leave sufficient time to raise additional funding

Key Actions Things to Consider Tool Kit
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)

Financial Terms Definitions

Sample Term Sheet(AOA)

Convertible Note(AOA)

Equity Offerings(AOA)

Create a 10 min investor pitch suitable for raising money Are all your assumptions covered?

The Feasibility Report and the investor pitch should compliment and match content

Pitch Deck Template
Practice pitch in front of experienced investors & experts Expect & encourage questions. Are all of them addressed in the pitch?

Plan to iterate the presentation many times before actually pitching

LSWI Pitch Coaching and Consulting
Put together a budget that will get you through Proof of Concept and Series A financing Try to be a virtual company as long as possible

Only spend money on things that create value

  • Avoid items that contribute to ongoing overhead
  • Use consultants where you can
Startup Financials Template
Identify potential investors:

  • Angels & Angel Networks
  • Friends and Family
  • Self Funding
  • Sweat Equity Funding

 

Non-Dilutive Funding: Government grants, etc

Good investors bring more than money to the party i.e. expertise, network, credibility, etc

  • Get ones you can and want to work with long term
WA Investor Database

LSWI SBIR Grant Writing Program

WINGS

Raise enough money to get you through Proof of Concept and to Series A financing Don’t try to raise money before you firmly understand your final value proposition

Do you have a valuation?

  • Put a realistic valuation on the company
  • Don’t be too valuation sensitive

Take money when it is offered and, if possible, take more than you think you need.

  • It generally takes longer and costs more than you think to get to the next stage.
  • Running out of money before you have reached your next investable milestone can result in unhappy investors and loss of credibility
Valuation Worksheet