Investable companies don’t occur by accident. In fact, the opposite may be true; many companies may accidentally become un-investable. This article is part #2 of a two part series that shares tips as to why startups may be investable enabling them to obtain funding from angel groups and VCs.
Topic: Due Diligence
How to Build a Winning Team
How to Create a Strategy, Vision and Mission
How to Create an Advisory Board
How to Get Funding
How to Improve Your Company
How to Improve Your Pitch
How to Start Your Company
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Entrepreneur Events Spotlight
Entrepreneurial Ecosystem Spotlight
Startup Accelerator Spotlight
Startup Investor Spotlight
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Investable companies don’t occur by accident. In fact, the opposite may be true; many companies may accidentally become un-investable.
Preparing the due diligence package is no longer a separate, sequential item. Once the major items related to the startups stage of development are completed, the due diligence package is ready for the investor.
A principal goal in the life of a scalable startup company is getting external equity funding. The closing of a funding round is cause for celebration. However, founders are often left with a somewhat bitter-sweet taste when they realize what just happened.
The greatest hurdle to getting startup funding is providing the Investor with the information that illuminates your company and shows the details of why you are “investable.” That is the process of creating a world class Due Diligence package.
There are a variety of reasons for this reaction from investors:4 Reasons Why Startup Investors View Debt As A Mortal Sin! To avoid the purgatory of being non fundable, entrepreneurs should consider the investor’s view and structure their balance sheet in an “investor friendly” manner before submitting an executive summary and financials to startup investors for consideration.
Concept stage startups are usually funded by entrepreneurs, family, friends and individual angels. An opportunity has presented itself to you, an idea for a scalable business you see clearly in your mind. How much is your idea worth? It all depends on what you do with it.
For want of the IPO, the decades newest Unicorn was lost. And all for the want of the appropriate tools.
As Angels and VCs are tightening their fists, entrepreneurs are less likely to get next stage funding. Having a great team, pitch and front man are simply not enough.
Adequately addressing these 8 factors in your pitch to an angel group will build confidence in the minds of the investors, improving the ultimate probability of funding.