💰 Don’t Try To Fundraise Without These Docs - Part 1

Toby Egbuna
January 25, 2024

Hello! Welcome to my newsletter - Finessing Funding💰. Each week, I’ll be sharing stories, strategies, and ideas about funding for your startup. Get Finessing funding delivered to your inbox every week 👇🏾

Note: this is the what behind CREAM. Over the next few weeks/months, I’ll be sharing the how. Subscribe to my newsletter to get these insights straight to your inbox.

CREAM:

1. Consider if VC fundraising is for you - read this section here

2. Ready your documents ← today’s newsletter

3. Establish an investor pipeline

4. Activate your fundraising round

5. Maintain relationships

How to waste time when fundraising

The best way to waste time when fundraising is to talk to the wrong investors (more on this in the Establish section).

The second best way is to not have your documents and communications ready. Fundraising is monotonous. VCs claim to be differentiated, but they all ask the same questions and they all want to see the same thing. Use this to your benefit by having your documents ready so you can use the same content for every investor. Having a standardized pitch deck, sending the same follow-up email, sharing the same financial model, etc. means you spend less time on manual work and more time focusing on the next meeting.

If you aren’t prepared, you’ll spend hours typing fresh communications or customizing decks for different investors, and we just can’t have that!

The five things you should have at hand before you go out to raise VC

Now that you’ve considered whether VC is right for you, let’s get your documents ready.

Note: we’ll cover items 3-5 in part 2 of this series.

1. Pitch deck

You’re probably familiar with this. Your pitch deck is the a 12-15 slide representation of your company and your vision. I’ll share more about what should go into your deck below, but the big thing to remember is that your deck should be enough for the investor to take the meeting. Don’t put too many words, make it easy to skim (the average investor spends about 3 mins reading a deck), and make sure it’s at least somewhat pretty.

2. Communications

Fundraising is basically all communications. Between emails, phone calls, texts, and video meetings, you want to be concise when talking to investors so you can keep their attention and get the next meeting.

This is where your email templates will come in. You will want to have the following on deck before you start raising:

1. Forwardable email

2. Follow up after first meeting

3. Declined investment - warm intro request

The forwardable email is #1 for a reason. It is the single most important communication you need to raise VC funding, and a good one can be the difference between getting a check and an investor passing on a meeting.

3. Financial model

The most nebulous of all of the documents, your financial model should include actual numbers from the last 6-12 months your company has been in operation, and also projections for the next 12-18 months.

4. Market growth calculations

Your market growth calculations are projections for the market you operate in. This spreadsheet shows investors know how you think about your addressable market and how much of that market you believe you can capture. Calculations are optional, but they do a lot to build investor confidence in you.

5. Data room

Your data room is a virtual folder that contains your company’s documentation. Here’s what should be in your data room:

1. Pitch deck

2. Financial model

3. Market growth calculations

4. Cap table

5. Employee roster and background

6. Legal docs (certificates of incorporation, stuff like that)

7. Customer lists

8. Financial statements (P&L, balance sheet, income statement)

Note: the Ready section of CREAM will take up the most time, so fittingly, I’m breaking this into two separate newsletters. Today’s edition will cover your pitch deck and communications.

What should go into your pitch deck

You could Google this and find 100 different articles that give you 100 different combinations of slides for your pitch deck. While there are some slides that every pitch deck should have, there is a combination that worked very well for my pre-seed round.

The 14 slides you should put in your pitch deck

The slides below are what I would recommend to put into your deck:

1. Cover

2. Overview/one-pager

3. The vision

4. Problem

5. Solution

6. How it works

7. Market opportunity

8. Market growth

9. Business model

10. Traction

11. Go-to-market

12. Competition

13. Fundraise

14. Team

Let’s dive into each 👇🏾

Cover

The cover slide is the first slide that people see. Be sure to include your contact information.

Overview/one-pager

Your one-pager is a summary of the most important parts of your deck: What you do, who’s on your team, traction you’ve made, and market insights.

If there’s something else that you think makes your company stand out, include it here. Maybe you have a great way to get in front of customers (go-to-market) or an intriguing business model. use this slide to showcase what sets your company apart.

The vision

If you’re raising in the early-stages, you’ll want to communicate the vision behind your company.

Quick aside - when I raised our pre-seed, I didn’t talk about our vision for the first ~30 meetings, and I got all no’s. Once I understood that the vision is what gets investors excited about what you’re building, everything changed.

You can pitch vision or traction, but never both. If you’re early-stage, you probably don’t have that much traction, so your best bet is to raise on vision.

Problem

1-2 sentences about the problem you’re solving. Keep this simple and relate it to the vision.

Solution

1-2 sentences about how your product solves the problem. Keep this simple too; remember that you can explain the solution in the next slide.

How it works

Explain how your product achieves the solution mentioned in the previous slide. Include images so the investor can see the product. Bonus points if you can link a 1-2 min demo video to this slide.

Market opportunity

Emphasis on opportunity. Tell the investor just how big of a market you’re operating in and how much it’s growing. This will be supported by your market growth calculations (covered in next week’s newsletter).

Market growth

Show how prepared you are by clearly articulating how you see the market growing or how you assume that the market has grown. Create multiple scenarios and use one of those scenarios for your market opportunity slide (I used our base scenario of $2.63B as the size of our market).

Business model

This is how you make money. This slide can be plain. Just make sure it clearly tells investors how the business model works so they can understand what customer growth needs to be to hit their revenue goals.

Traction

The money slide! Talk about traction that you’ve had with customers. Include revenue, but if that’s not your top metric, feel free to include number of users, pilots, or something else that shows that you’ve made progress.

Go-to-market

This is how you get in front of customers. Try to be specific here; don’t say that you’re paying for Google ads or publishing content - everyone does that. Let the investors know that you’ve thought about this and tried multiple routes to find one that you can use to get to your first 10-25 customers.

Competition

This is especially important if you’re entering a crowded space. You probably think your idea is novel, but I promise you’re competing against something. Even if you’re entering a brand new space, you should talk about how people are currently solving the problem you’re tackling here.

Fundraise

Okay, sorry, this is literally the money slide. Tell the investor how much you’re raising and how much of the round has been filled. Pay more attention to the milestones you’ll reach with the money and less on how you’re going to use the funds.

Team

Tell the investor about the team behind the company. If you have relevant experience in your space or if your team has previously worked at a VC-backed company, include that. If not, use this slide to talk about your company’s story.

Better yet, do both!

The Chezie pre-seed pitch deck

I’ve made our Chezie pre-seed deck available to you to dive in! You can duplicate it if you’d like to use it as a template. Simply create a Pitch.com account (I highly recommend using Pitch for all of your presentations - this isn’t a paid ad; the product is just fantastic).

You can find our pre-seed deck here.

What to use for your pitch deck

As mentioned above, I highly suggest using Pitch.com for your deck. It’s made specifically for beautiful, easy to read slide decks, and there are a ton of pitch deck templates that you spin up in under 20 mins to match your company’s brand.

However, if you aren’t sold on Pitch.com, here are the products I’d suggest using:

1. Google Slides

   • Pros - Lives on the cloud so you can access it anywhere.

   • Cons - doesn’t always export to PDF well. Very few native templates to get you started.

2. PowerPoint

   • Pros - you’re probably familiar with it. Easy to export into PDF format and share.

   • Cons - you have to buy a license to use it. Can be clunky (as can a lot of Microsoft products).

3. Canva

   • Pros - Tons of templates. Also works well for creating social media content.

   • Cons - it’s difficult to do things like create tables and format text. There’s also no styling set so you have to manually update individually.

All of the communications you need when fundraising

About 25% of your fundraising process is going to happen outside of meetings. Asking for warm intros, following up with investors, sharing requested files - all of this will eat up a lot of your time.

Set yourself up for success by having your communications ready. This has two benefits:

1. Speed - The faster you get back to an investor, the faster you can figure out if they’re going to invest.

2. Efficiency - At your peak, you’ll be having 5+ meetings a day. Knowing this, it’s important to be efficient. Having plug and play comms will save you loads of time.

Your VC comms, broken down

To help out, I’m linking templates for each of these below!

1. Forwardable email

   VC runs on warm introductions. Investors expect these sorts of communications and get 20-30 of them a day.

   Your forwardable email is the foundation of your communications when fundraising. A forwardable email allows people to literally forward your message to the intended investor without having to add additional context or make any edits. I’ll share details on how to use your forwardable email in the Establish and Activate sections of this guide.

2. Declined investment - warm intro request

   Most investors will turn you down, but it won’t always be because they aren’t interested. Sometimes people turn you down because they couldn’t get their entire team to buy in, or the terms weren’t what they wanted, or some other reason.

   When you’re talking with investors, you’re going to build relationships. For the investors that turn you down but seem supportive of you and what you’re building, don’t be afraid to ask them for introductions to people in their network. I probably got 20-25 introductions from investors who themselves passed on investing.

3. Follow up after first meeting

   You’re going to have a lot of first meetings and significantly fewer second meetings. Understanding this, have your follow up prepped. Include a link to your data room with your deck, financials, and market growth calculations, and note anything related to the conversation that you had with the investor.

Summary

Set yourself up for success with the comms you need. Next week we’ll dive into your financial model, market growth calculations, and data room.