Equity funding

Preparing for fundraising – be aware that

• Both debt and equity investment require some sort of due diligence
• Fundraising is a complex activity which needs time for preparation, negotiation and closing
• Don’t get timing wrong. Minimum time required for fundraising is 2-3 months, ensure a longer runway
• Prepare and gather all needed documents before the fundraising. This will spare your time and bring a dynamic to the process
• List of all needed documents and data for both debt and equity financing

Required documents for a business loan

• Financial Documents usually last 2-3 years including P&L, Cashflow statement and Balance Sheet
• Audited financials
• Tax returns
• Business licenses and Permits
• Accounts Receivables and Accounts Payables
• Detail of all Loans and Leases
• Signed contracts
• Proof of collateral
• Income Proof Bank Statement for last 2 3 years
• Business ownership proof Memorandum & Articled of Association
• Business plan (including financial plan)

Required documents for equity financing.

Everything as for a business loan but as equity investments are more common in not yet profitable businesses other parts are needed additionally. You will also need to provide:

• Innovative and competitive product or service with strong validation
• Competition analysis
• Demonstration of a strong team and leadership
• Intellectual property ownership

Fundraising tips for equity financing

• Always ask for advice and feedback, send updates prior fundraising
• Personalized and numbers-oriented introductory mails
• Know your numbers, metrics, market sizing and substitutes
• Whole process can take several months (2 6), prepare materials
• Understand market standards for Term sheets / Convertible notes
• Find an investor who you want to build the company with
• Know which investors fit you with their investment strategy
• Show validation MVP or product ready? Future customer insights / feedback is not validation yet but might be enough for a pre seed
• Market insights catalysators, size, competitiveness in the field
• How to acquire customers any competitive edge?
• Team's experience Product/Founder/Market fit

For more information visit:
www.ngi.eu