8 Types Of Information Investors Look For In A start Up Pitch
8 Types of information investors look for in a start up pitch. Securing funding for a start up idea can be scary and satisfying at the same time, that is if things go according to plan. But how much preparation is enough for an investor pitch in terms of paperwork and presentation you might wonder.
The only way to address the due diligence needs of investors is to accomplish them over time as you negotiate through your startup journey. This requires that they are completed during the development and growth of the company. Here is a look at the top possible types of information an investor may require;
1.Investor Pitch Documents
Investors will be qualifying the entrepreneur and their startup from the initial point of interaction. As a result, the entrepreneur who will be seeking investment should have a prepared elevator pitch and executive summary available as soon as they realize outside funding will be sought. Presentation materials the entrepreneur should develop include their pitch deck and their business canvas or business plan.
2.Organizational Documents
Investors will check the validity of the company by confirming all government filings, such as Articles of Organization / Incorporation, Applications for Employer Identification Numbers, Authorizations to Operate, Assumed Names Requests and Annual Reports have been filed. Startup documents such as Founders and Operating Agreements, Subscription and Shareholders Rights. Finally, it is typical for the investor to request various stakeholder tables such as Tables of Shareholders, Option Holders, Warrant Holders, and Debt Holders as well as relevant contact information.
3.Management & Organization Information
Understanding the company’s structure, its team and their ability to execute is important to investors so they will typically request structural documents such as employee listings, organizational charts, and lists of advisory and board members. Bios and resumes for key players are typically requested as well.
4.Development Plans
In order to understand the company’s strategic approach, investors will want to review various planning documents including Financial Plans, Marketing Plans, Sales Plans and Technology Plans.
5.Products / Services
If the product or service has not been developed, investor questions will include issues related to the technologies, skills required for development and related risks. If it has been developed, investors will require you to provide details related to your product or service such as the cost of development and estimated manufacturing cost at scale.
6.Customers & Clients
Key customer lists with contact information, press releases and lists of the competition with summaries of their strengths and weaknesses are examples of customer and client information that may potentially be requested by investors.
7.Financial Information
Current and previous year financial statements, federal, state and local income taxes, insurance policies, cap tables, lists of liabilities and accounting methodologies are a few of the key pieces of financial data that may be requested.
8.Legal Information
Investors will have a keen interest in legal opinions received, pending or potential litigation, discussions with regulatory and other government agencies and licenses, permits and consents.
