Before getting into the world of killer pitches, let’s put things in order for you, your organization, and your future investors.
We have listed seven essential topics you will face during the early stages of your company, especially if you are interested in fundraising.
1. Why get corporate?
Investors need to make sure that a company validly exists and has full capacity to perform its obligations before investing in it. Make sure that you have all the corporate documents that your investors need to assure that. These may include: articles of association; certificate of incorporation; excerpt from a commercial register; shareholders register; board regulations; shareholders agreement (if any); details of company representatives; and a list of authorised signatories. Please bear in mind that these documents can vary according to the type of fundraising, your business, company type, and your investors’ needs for their operations.
2. Why is having a business plan helpful? Having a business plan is beneficial for your company’s goals. It gives you a clear structure and a roadmap, which are usually overlooked while handling hundreds of tasks on your own. This very basic document can keep you sane during the process. This is the map for your road trip, your to-do list for your big weekend party. Embrace it, work on it. We promise you will enjoy the results.
3. Why is Intellectual Property so important?
You should make sure your company owns the relevant intellectual property. This is one of the most important points when you are working with investors. They believe in you and would like to invest in this great idea of yours. They need to make sure that valuable idea is protected. It’s better to secure the IP rights from the very beginning to avoid complications in the future. You wouldn’t want others to take advantage of your hard work.
4. Why does having up to date financial information go a long way?
We all know that keeping your finances up to date is essential for legal compliance purposes, including tax filings. Among others, income statements, balance sheets, and cash flow statements are helpful for you to understand your company’s current status while helping you get prepared for the future of your business and fundraising.
5. Why is introducing your team more than just a due diligence piece?
Investors love to understand your organisation and the way you work together. Especially in early/mid-stage startups, investors pay great attention to the founders and their team. More precisely, they are investing in you. Telling them about your organisation and your team will help them get to know you and connect with you in a better way.
6. Why are cap tables so crucial?
Imagine cap tables as medical check-ups for your company. It is fundamental to have a healthy cap table from the incorporation of your company. Everyone should have a clear picture of who owns what in the company (ordinary shares, preferred shares, options, etc.). With, in the best case, multiple funding rounds, your cap table will become more complex and fuller. That’s why it’s important to have control over it from the beginning.
7. Why is documentation necessary?
Documentation can include various company policies (e.g., compliance, data protection), insurance documents, and cyber security protocols. Having a structured system from the beginning will increase your organisation’s growth potential and will let you spend your precious time on more crucial topics when needed. For sure, it will make your life easier.
Be extra prepared for your fundraising and your relationship with future investors with some basic steps from the beginning. This will bring you and your organization success, efficiency and help you to be nimble. Be straightforward and open with your future investors, as they are here to help you and ready for the journey together. Let’s hit the road!
