The essential checklist for raising capital
As excitement builds about your venture or idea and you’re getting closer to needing extra funds, take the following tips into consideration:
- Business plan templates: Have you looked online or contacted people and found templates and guidelines to develop a business plan?
- Prepare your business plan: Even if you don’t have to give it to an investor, you need to know your business plan inside and out.
- All records up to date: Have financial accounts and customer revenues (if you have them) up to date and presented in a positive and useful light.
- Corporate records: Make your corporate records and accounts seem professionally prepared. If you have a co-founder, make sure you already have a shareholder’s agreement.
- Shareholders on board: If you have shareholders, make sure they’re on board with capital raising.
- Execution plan: What exactly will you do when the money is raised?
- Achievement goals: Have realistic goals set about what you think you can achieve and make these goals exciting for an investor. Aim to under-promise slightly and then over-deliver. Matt Macfarlane from m15e ventures says: “If you think you can hit $1m in sales you should be going in and saying I’m very confident of being able to hit $500,000 in sales in terms of concrete commitments”.
- Controllable milestones: What are the milestones and are they controllable? You need to show you can control what happens as you lead up to successfully reaching a milestone. For example, it is easier to control costs than sales. It’s harder to control the revenue that comes in because that is up to your customers.
- Capital advice: Have you asked advice from colleagues, friends, accountants, or any other people you know who may have had experience in raising capital?
- Presentation research: Look online for sample presentations that you can use to source money. Look at posts by venture capital and angel investors, as well as others. Use those as guidelines.
- Prepare yourself: There are online videos of investment pitches at “demo” nights for accelerator programs. Watch these. Do more research, look at investor pitch decks, learn as much as possible, and then have a go at preparing your pitch before seeking paid advisors. Paid advisors can be distracting and potentially expensive.
- Find support: Get involved in start-up groups or local pitch events. There are groups which organise pitch events for accelerator programs, with graduation at the end.
- A people list: Who will you approach? What information do you know about them? Build on that list by adding who can help you connect with them through introductions.
- Elevator pitch: Make it a strong, two sentence explanation of the opportunity.
- Teaser email: Essentially say “can I send you a pitch?” and/or “can I meet with you?”.
Congratulations. If you’ve ticked off each box, you’re ready to take the next step.