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Fundraising Documents Explained
Read time 1.4 minutes.
Today, we will briefly review all of the documents you will need to share with investors during the fundraising process and the purpose of each document.
Many founders don’t know all these documents and are caught off guard when asked for them. Others don’t understand their purpose and prepare them incorrectly as a result.
Attention Deck - This is the pitch deck that you send via email. It’s like a trailer for a movie. Its purpose is solely to have a strong hook that attracts investors and gets them to book a meeting with you to explore further. This deck is NOT going to close your funding round; it doesn’t need to be in-depth; it just needs to create enough intrigue to open the door for you.
Pitch Deck - Your pitch deck is a visual guide to accompany your pitch. It shouldn’t work as a standalone document. It’s a background actor in the play you will present when meeting with VCs. Build this deck around what you are going to say; don’t build your pitch around this deck.
Short Deal Memo - This should be a 2-6 page document that summarizes the investment opportunity in more detail than the deck. It should be written in a narrative tone and sent to a VC after your first meeting. The goal with this is to ensure that even after the meeting, as the VC starts to look into your company, you continue to control the narrative around your business, and you are the one providing the insights, market stats and more.
Lengthy Deal Memo - This should be a 15+ page memo detailing every aspect of an investment opportunity. This is the exact document that VCs use internally when a Principal wants to convince a Partner to take a meeting with you, or a Partner wants to convince the other Partners to approve the investment. The goal here is to make sure that the internal memo circulated within a VC firm isn’t written by some kid a couple of years out of their MBA in a few hours but is an adaptation of a document you’ve spent months preparing. You should share this as soon as you hear someone say they will discuss the opportunity internally.
Due Diligence Package - This package is what you send after you have a term sheet. It should include all of your legal documents, such as IP, incorporation docs, shareholder agreements, etc. This shouldn’t be shared before a signed term sheet or NDA exists. (Never expect a VC to sign that NDA before there is a term sheet).
How many of these documents do you prepare when fundraising? |
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Onwards and Upwards,
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