Startup Fundraising Checklist

Matt Preuss
Marketing Manager

Startups are in constant competition for 2 resources — capital and talent. One of the most common ways to secure capital for a startup is by raising venture capital. However, raising capital for a startup, especially an early-stage startup, is no easy feat. In order to best improve your odds of raising capital, you need to have a game plan and system in place to kick off your raise.

At Visible, we often compare a fundraise to a traditional B2B sales process. You are adding investors (leads) to the top of your funnel, nurturing them with Updates and meetings in the middle, and ideally closing them as a new investors at the bottom of the funnel.

Related Resource: All Encompassing Startup Fundraising Guide

Just as a sales and marketing team has a process for acquiring customers, so should a founder when setting out to raise capital. Learn more below:

1) Display Growth and Traction

First things first, you need to make sure that your company is in a position to raise venture capital. Investors are generally taking a major risk by funding startups so it is important to demonstrate that you have the ability to generate outsized returns. One of the main things investors will look to is your company’s growth and traction.

In order to do so, it is important to have a system in place to track and monitor your key metrics. A few of our favorite resources to get started:

Why This Item Is Important

As we previously mentioned, investors are taking on risk so they want to see that your startup has the ability to grow into a large company. The easiest way to do this is by showing consistent and rapid growth from one period to the next.

2) Define Your Startups Milestones and Fundraising Goals

If you’ve determined that your business is in a good place to raise venture capital, it is time to put together milestones and goals for your fundraise. A couple of questions you’ll want to ask yourself and think through before raising:

  • How much capital do I want to raise?
  • When do we need new capital by?
  • What valuation should we raise at?
  • What will we do with capital once it is in the bank?

Related Resource: The Investor Due Diligence Checklist: How to Treat New VCs Like Business Partners

Why This Item Is Important

Before setting out to launch a new acquisition campaign, you likely have goals and milestones in place. The same can be said for a fundraise. By having a list of milestones and goals in place, you will be able to field any questions from investors as you’ve done the legwork upfront and will come off as prepared and calculated with your raise.

3) Make Sure You Have a Compelling Pitch Deck

At the end of the day, fundraising is storytelling. You will want to hook your investors and help them build conviction for why they should invest. One of the most popular tools for telling your story is a pitch deck. Check out a few of our favorite resources to help you build your next pitch deck below:

Why This Item Is Important

Investors generally have little to no context about your business and your market. In order to help them build conviction around your business you need to arm them with the right information and assets to move as quickly as possible to invest in your company. A pitch deck is a great tool to distribute to potential investors and use as a guiding tool in your raise.

4) Prove Your Product/Service Is Scalable

As we previously mentioned, investors want to fund companies that have the ability to turn into large businesses and exits. One of the aspects they will focus on most is your ability to build your customer base and revenue at scale. During the course of your raise investors may ask to see a few of the following things:

  • Metric growth as it relates to your acquisition efforts
  • How your current acquisition strategy works
  • Stories from customers that show you have happy customers

Why This Item Is Important

Without a clear path to scale your revenue, investors will likely have no interest in funding your business. You need to demonstrate that you have had success in the past or have a gameplan to scale revenue in the future. If you have an acquisition strategy that is already working well, investors will feel more inclined to invest as you should be able to demonstrate how their capital will directly grow the business using your existing channels.

5) Build a List of Investors

Just how a sales process starts by identifying your ICP and potential customers, the same is a true for a venture fundraise. VC funds invest in all sorts of companies – ranging from early stage to late, new markets to old, small teams and big, etc.

We suggest starting by building a list of 50-100 investors that you believe are a strong fit for your company and staying focused on them during your fundraise. A couple of traits that are important to pay attention to (from our post, Building Your Ideal Investor Persona):

  • Location – Where are you located? Do you need local investors? Or maybe you are looking for connections and networks in strategic geographies.
  • Industry Focus – What type of company are you? Where should your future investors/partners be focused? e.g. If you’re a B2B SaaS company don’t waste your time with marketplace focused investors. Mark Suster suggest that it is best to prioritize investors with companies in your space.
  • Stage Focus – What size check/round are you raising? e.g. If you’re raising a $1M seed round avoid a firm with $2B AUM. If you’re raising a $30M round avoid a firm with $75M AUM.
  • Current Portfolio – What type of companies should be a signal to you that they’re a good fit? Is there a high likelihood they’ve invested in one of your competitors? If so, best to avoid as they likely won’t double down their bet with a competitor to a portfolio co.
  • Motivators – What do want to get out of your investors and what do they want to get out of you? Do they need to match your values and culture?
  • Deal Velocity – Are you in need of capital as soon as possible? Or are you taking your time and looking for strategic investors? Varying investor’s have different philosophies for the velocity they’re making deals. Point Nine Capital and Kima ventures are both regarded as top firms in Europe. However, Point Nine makes ~10 investments a year whereas Kima makes 1-2 investments a week.

Why This Item Is Important

Randomly reaching out to any investor is a poor strategy when it comes to pitching investors. You want to make sure you are spending your time on the most relevant investors for your business. By starting with a list, you’ll be able to customize your outreach and make sure you are spending time on the right investors for your business.

Related Resource: Our Favorite Blogs for Getting Started with Fundraising

Check out our free investor database, Visible Connect, to filter and find the right investors for your business.

6) Tell a Story About Your Company

As we mentioned earlier, storytelling is a component of a successful fundraise. While metrics, data, traction, etc. will certainly grab the attention of investors, that will likely not be the sole reason they write a check. As a founder it is your duty to build a compelling narrative around your business that will help investors build an emotional understanding of your business. This could be things like your background, founding story, customer stories, etc.

Why This Item Is Important

While the duty of a VC is to generate returns for their limited partners, there is still a human element to investing. Investors, especially at the early stage, are generally investing in the founder. In order to help them build conviction in you and your business, you need to present stories that will help them gain a new understanding of your business.

7) Introduce Your Team and Stakeholders

Of course, founders are not the only people behind a business. You might have co-founders or early teammates that have helped get your business to where it is today. Be sure to prep your current teammates and inform them on the status of the raise. Investors will want to hear about your teammates and earliest hires to understand why your business is positioned to execute on the problem you are solving.

Why This Item Is Important

At the early stages, investors are generally placing a bet on the team and the vision of the company. They will look to your early hires and executives to help them decide if your team is right for building the business. They will likely want to see relevant experience, roles, and traits that make your team stand out from your competitors.

8) Include a Cap Table

One of the benefits of investing in private companies is the ownership and equity that comes with it. Because of this, investors will want to see the ownership breakdown of your company. This is generally best served via a cap table. There are countless tools (we suggest Pulley) that can help you quickly share your most up-to-date cap table.

Why This Item Is Important

Cap tables are another tool that help VCs understand the structure of your business. It will help them understand their potential ownership position and the investors they will be working alongside. While you might not need to share a cap table from the start with investors you should make sure it is up-to-date and ready for later stages of your fundraising process.

9) Signup For a Fundraising Relationship Platform

Just how a sales and marketing team have dedicated tools, so should your fundraise. By finding a tool to track and manage your fundraise you’ll be able to spend more time on what actual matters, building your business.

Find investors, manage your raise, share your pitch deck, and update your investors all from one place. Try Visible for free for 14 days here.

Why This Item Is Important

Having a dedicated place to keep tabs on your fundraise and investor relations will not only help you speed up your fundraise but will allow you to focus on building your business.

Visible Is Here to Help You WIth Your Fundraising

Fundraising is difficult. Our mission at Visible is to help more startups succeed. We’ve built a set of tools that will help you with every step of your fundraising journey.

Find investors, manage your raise, share your pitch deck, and update your investors all from one place. Try Visible for free for 14 days here.

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