Funding rounds are nowadays often concluded in a matter of weeks, so being well-prepared with all necessary documents is going to help move things along quickly.
It will also send a strongly positive signal to investors if you come well prepared. Execution risk (is the team able to pull this off?) is a major consideration in any investor decision, so if you demonstrate that you are on top of things, it helps a lot.
For a typical raise you will need at least
- Pitch deck: There are plenty of resources on how to build an ideal deck. Ideally you should have a short version (10-15 pages) for initial pitches and send-outs and a longer version (up to 40 pages) with supporting materials for in-depth discussions.
- Financial model: VCs will want to see a financial model in order to understand how you structure your business and what your financial assumptions are, including such crucial things as unit costs and CAC/LTV ratios. A financial model should at least cover the current and next two years, sometimes it can go out up to five years. It is important to understand that investors don't expect you to predict the future. Of course the real numbers will look different in reality. But they need this perspective to understand your thinking from a quantitative point of view.
- Cap table: VCs want to understand the current ownership, so be prepared with a clean and correct cap table. Using a tool such as Ledgy makes this easier.
- Pipeline excerpt or funnel metrics: If you're a B2B business, investors will want to understand who is currently in your sales funnel. In B2C, they will want to understand what your funnel metrics (conversion rates etc.) look like.
Optional documents:
- Investor FAQ: Investor questions tend to be quite similar, so it is often a good idea to write down concise answers for the most frequently asked questions. You will still be asked these questions in calls, but having prepared a clear answer will always help.
- Product Demo Videos: Many investors will want to try the product themselves (always a positive sign), but for others a short video will help.
- Detailed product roadmap
- Detailed competitive differentiation: A crucial investor question is "how are you different and better than your competition"? You should have a short one-slide answer in your pitch deck, but providing more detailed information for advanced discussions will help.
- Customer personas: Illustrates how you think about your target market.
- Org chart and hiring plan: Also demonstrates ability to think ahead about an important next step
Thoughts? Feedback? Something missing? Please let us know: jan-hendrik.buerk@b2venture.vc