8 Steps to Successful Capital Raising

You’ve set the goal: Raise Capital. That was easy. You have just committed to a large amount of work that will probably take half your time for the next six months. If you do it badly, it can be a time of great stress with many deadlines and little time to prepare. Having a process simplifies reaching the investment and allows you to plan ahead for what’s coming. 

There are eight major steps you will go through in your capital raise with Investors, Business Angels and Venture Capital. You can even use this to help you with your pitch at StartCon 2016.

For an IPO some of these steps are simply re-ordered. The steps are: Write Pitch, Review, Preliminary Due Diligence, Market Company, Presentations, Due Diligence, Negotiate, and Sign Deal. Let’s look at them in more detail:

1. Write Pitch

In “10 Key Pitch Slides” I detail the key contents of a pitch or presentation to investors. Make sure you cover each of these subjects in your presentation.

2. Review

Ask some friendly colleagues (other entrepreneurs, your accountant, lawyer, etc.) to review your work. Then ask some strangers to take a look (telling them to imagine that they are investors). Hire a professional to review the slides and give you formal feedback. Using your entrepreneurial skill, take all the results and improve your pitch deck.

3. Preliminary Due Diligence

When an investor is interested they will ask all kinds of questions of your company, idea, share structure, financial plan, legal structure, risks, etc. Prepare for them and remember to answer the questions from the point of view of an investor (not a customer buying your product). Investors are asking you questions because you are the expert in this market niche so if you are uncertain they will pass on the opportunity to invest. Check out this free eBook of typical questions and hints on how to answer them.

4. Market Company

Typically Angel Networks will have Pitch Nights every four to six weeks so you will need to be ready to slot into their process at the right time. When you get to do an IPO then the ideal window to market reduces to just a single, two month period every year.

5. Presentations

At last you make you use your pitch. Every time you do so, make sure you have rehearsed it well and have other trusted parties in the audience to try and measure investor reactions. Update your pitch for the next presentation.

6. Due Diligence

The formal due diligence will be initiated by Investors. This is where the value of your Preliminary Due Diligence work will reap rewards since by being responsive to Investors you build their trust and confidence in you as a leader of the company they are about to invest in.

7. Negotiate

Once Investors are keen to put their money in, it is time to work through all the major and minor points of the agreement between you and your investors. Ensure you have prepared which points are non-negotiable and those that you can trade.

8. Sign Deal

At last the deal is signed but don’t relax until the money has arrived in the bank. Many a deal has been derailed at the last minute due to an inappropriate comment.

If all goes to plan, after six months of hard graft you will have the investment… that was the easy part. Remember that financial plan you wrote six months earlier? Now you have to deliver it!

Read more about this topic at www.briandorricott.com


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