Investment Checklist

Despite the stories you might read about startups raising investment in ten seconds flat as they queue for coffee, it really doesn’t happen that way. Normally, securing investment is a process which you should allocate at least four months to (covering presentations, diligence, term sheet and long-form negotiation) and possibly longer. Before you ask for your first introduction, here’s the basic checklist that you need to have ready.

1. One (or two) page summary 

Your executive summary. Usually the thing that will get emailed around and form your introduction.

2. Investment deck 

The single most important element of raising investment. Worthy of an entire post, this should cover team, market, product, traction and use of capital.

3. Financial projections for three years 

Monthly for Year 1, quarterly for Years 2-3. Generally speaking, anyone who asks for five-year projections from a startup doesn’t know what they’re talking about. One year is realistic, two optimistic and three is a total guess. The good VCs understand this.

4. Detailed breakdown of your competition (and market)

You should expect to be asked for a good profile of your competitors and how you stack up against them. Be realistic-bullshit tends to be pretty obvious here. Also, some macro data on your market is very useful.

5. Some kind of product roadmap

Similar to your financials, you should be detailed in the shorter term (1yr) and more aspirational in the longer term (2yrs+).

6. Some kind of hiring plan 

You don’t need to know specifically who you’re going to hire but you should be able to give pretty detailed jobs specs and where you’ll poach them from.

7. Customer references 

Obviously the exact nature of this depends on what type of company you are. For a consumer-facing company, expect to share your analytics and prepare some cohort analyses. For a more enterprise-focused startup, have some testimonials lined up.

8. References for the company 

At least two e.g. advisor, strategic partner etc.

9. References for each founder

At least two per founder e.g. former investor, co-founder, colleague, boss etc.

10. Shareholder cap table

Current shareholder register. If you’re promised equity to people (e.g. advisors, the mob etc.) make sure you show it here.

  • Mattj

    Curious how you define “competitors” when building aesthetic products (such as games). I can answer most of the rest.

    • dylancollins

      Competition = What is that audience already playing (direct) or doing (indirect)?

  • Master

    How do you obtain references for the company, if you are a startup without advisors?

  • Jonathan Maher

    An old post but I suspect much remains relevant today? Would you update anything on here? Thanks