Fundraising in my experience
Fundraising feels like a myth when you are an entrepreneur, even more so when your company is just starting.
Here are some tips that I would like to share with you according to my experience:
- NEVER start raising money when you need it, star raising it 9 months in advance and again be choosy with your investors (by choosy I mean that you select them really well and your values and time horizons are aligned)
- When raising cash with investors for your company expect at 6 to 12 months to close a round and have the money in the company’s bank account.
- Expect to knock on a lot of doors before starting any real serious talks
- Don’t lose faith in you and your company, the road to funraising is long and energy consuming.
Presentation & Contents
There are many sources that can better guide you on what to present, but here are some suggestions:
- Put time, effort and design into your presentation, please don’t be mediocre
- It must include:
- The problem
- Market size
- How you are solving that problem for your customers (The Business)
- Explanation on how you are going to achieve your financial goals
- Team members
- Board members (in case you have a board of directors)
- Financial Projections (at least five years, 7 even better)
- Use of Funds (where the money coming in will be invested)
Make sure you have a good financial model projecting at least the numbers for the next 5 years with an input page where you and the investors can move variables around
It must include:
- Profit and Loss Statement (P&L)
- Balance Sheet
- Cash Flow Statement (very important for investors and yourself)
Remember to Consider in your cash flow and Balance Sheet your Capital Expenditures in order to achieve your Operating and Financial Goals. Capital Expenditures are the funds you need to invest in the company to maintain or grow a business, such as computers, software, buildings and other equipment
Valuing your Company
There are always different methodologies to value a company and they vary from industry to industry, make sure you are familiar with these methodologies because it will be an important part of the conversation, you may want to stick to the one methodology that gives you the highest value for your company, but it might not be the only one or the one investors are using.
It’s not all about the money … Even though the amount of money and the percentage you are selling are important, be sure to understand the terms the investors are asking in return for their investment, always have a lawyer help you in the process
There are numerous acceleration programs that can help you connect with investors within the Monterrey entrepreneurial ecosystem, in case you need help, please contact Demo Day Monterrey in Facebook – @demodaymty
I hope these suggestions are useful to you.