In order to position the opportunity that you and your startup represent to investors, you need to maintain accurate and updated information on your company in your investment materials and commit to keeping these resources updated moving forward in your current round, and later rounds.
This article contains details on how to develop a company one-pager to use with investors as well as a data room that will keep your most important company information organized for due diligence, it also requests a pitch deck and you can find extensive materials in the curriculum on proper pitch decks.
Please understand that these files you create (and keep up to date) will help both you and our team make effective and efficient intros with investors and much of what we are sharing is required for investments. If you have any questions regarding creating a data room or making your one-page summary, please ask it here so that others can see your questions in case they have the same ones.
IMPORTANT TO START:
You need to make sure that you provide us with consistent, uninterrupted access to the folders with your deck and summary and data room so that we can access these materials for investors.
To this end, you are responsible for keeping these files up to date on a regular basis. The simplest way to do this is to utilize “public link access” but not indexed/searchable Google Drive folders which includes the aforementioned files, and then provide us the link to this folder.
For fundraising and potential partner intro purposes, we encourage you to also send in updates, including newsletters, milestones, or major announcements that impact the trajectory and outlook of your company so that we can keep a pulse on your progress to [email protected].
The best format for this is to send with your company name and date of update (i.e. FY2018, 3Q19, etc.) as the subject. Remember that we don’t raise your round for you, your job is to raise capital, we connect investors in our network to you when you graduate and present at our quarterly expo.
We are an Accelerator, so our goal is to take momentum level traction and 25%-50% committed rounds to the next level with our networks. If we don’t invest in you during the program, your job is to keep engaging us and your advisor post graduation with your traction and milestones.
When traction and momentum are high, or when you just closed such and such investor is the BEST time to let us know because that’s the opportunity to accelerate momentum with additional investors and bring them all in at once- in investing nobody wants to lead but everyone follows.
To summarize, please submit to us the next two links using the Google Form below:
1. Google folder link with your pitch deck and executive one-pager, and;
2. Google folder link with access to your due diligence / data room
Google Form Link:
Pitch Deck + Company One-Pager for Investors – Guidelines & Suggested Format
Suggested Intro Pitch Deck Format:
This is a simple format to remind you to keep it simple. Remember that an intro pitch deck is to generate interest for a meeting and same goes for executive summary – don’t give too much in an intro pitch.
Just make sure to keep your most up to date PDF copy of your pitch deck in the Google Folder. At the close of a major round you very likely will have an intro deck and a longer in depth deck. Lastly please ensure your pitch deck is in a PDF format as PowerPoint doesn’t render in mobile devices well and exports from powerpoint often break as well, leading to bad graphics and font trailing off the pages.
Suggested Intro One-Pager Format:
Think of your one-pager as an executive summary of your company and deck. We offer both to investors and we recommend you do to. The goal is to showcase the most essential and important information in your business- what investors want to see- traction + team ability and experience to drive results.
In fact, some investors will only take a look at your one-pager before they even decide to learn more about your company through your slide deck and data room. This is why you need to spend some time creating a one-pager that positions your company as a high potential investment that makes sense.
As you create your one-pager, keep in mind that it provides your investors with:
You’ll notice that your one-pager will include items that your slide deck already contains, except that this information will be condensed into bullets and bits that fit into a single piece of paper – hence the term one-pager.
The standard format for a one-pager has a box on the right with the company name, logo, URL, number of employees, key players and advisors and important investors. Along the bottom of the page a short, wide box shows at-a-glance financials: gross revenues, expenditures and net for the current year and the next 3-4 years.
The middle of the page includes short 200-400 character paragraphs on these topics:
- One-line company pitch
Here are a few 1-pager templates and web resources to give you an idea of what to model off of, as well as an example 1-pager that would get an investor excited and some software to help you build one:
Once you complete your one-pager, make sure you save it as a PDF. This is the best format to use for sharing with investors as they simply open the PDF (online or offline) as opposed to having to open a word processor or presentation software to view its contents. Make it easy for them to say yes to you.
Overall, your goal in the 1 pager is to convey: you have experience in the industry (Ex. Founder Name 20+ years in industry), that you have not only traction but MOMENTUM (hitting an inflection point in growth), your market size and opportunity, and most of all that you can make it happen over anyone else.
Lastly, while we don’t recommend asking for money anywhere or terms, if you do mention money or capital needed, do it in this format- “we’re looking for X to allow us to gain this % of market in X months” or “X will give us X, which will allow us to hit profitability, and double down investing in gaining X more momentum in X period of time so we can hit X revenue by year X.”
Data Rooms Standards & Expectations for Newchip Startups
If you’re serious about closing a round of investment from serious investors, then your company needs a due diligence data room. You don’t have to give it up front, and we recommend not to. It’s just there so you have an organized process to speed up diligence from months to a few days.
Top tier investors will always ask for access to the data room because that is where credible startups with viable investment opportunities will store access to corporate documents and materials for investors to easily “validate” your startup and check the boxes to make an investment.
Not only will a data room demonstrate to investors that you’re serious about raising capital, but it will show that you are organized, responsible, and ultimately running a real company. Moreover, once you build an investment round, you will likely have a group of investors and the last thing you want is to deal with a growing variety of individual requests for this document or that document.
You can save yourself a great deal of time, effort, and headaches by taking the time to build a data room that includes the bulk of what most investors need to know before they write you a check. Keep in mind, each fund will typically have its own due diligence list which can include more (or less) items for revision.
It’s our recommendation to give a fund “more” than they ask for in regards to a data room as it will set you apart from entrepreneurs with no diligence documents and help you close a deal faster. Build a robust data room that keeps investors interested and engaged in your startup opportunity so they trust you.
You will also need to have all of this information and documents ready, and potentially more, when your company reaches Series A territory. So it would behoove you build a solid data room now and prepare for your future investment rounds with bigger investors. Always be prepared for the unexpected.
So how do you build a data room? The simplest and most effective way to do this is by compiling and organizing this information in a centralized document sharing solution, such as Google Drive or Dropbox. There are professional systems out there, however most companies opt to keep it “affordable” and keep their non-secret items (ie, your code, patents, etc) out of these rooms.
Your data room should be organized per the categories listed below and your documents ought to be prepared in their appropriate file type in respect to their purpose (ie, financial models exist in Excel or Sheet files, Product roadmaps exist in PDF or Word Doc/Document files, company pitch decks exist in either PDF or PowerPoint/Presentation files, etc.
Just remember to label each folder clearly and organize the right documents into the appropriate folder, also remember to include the date on the filename so investors know what is most current and how recent it is.. In doing so, you will likely delight your potential investors and often it will be so complete that they will not “dig” as much compared to if they had to ask for every single document individually.
Filename format: DocumentName_M-D-Y.pdf
Standard Data Room Checklist for Startups
Here is a Google Excel that we’ve already created that you can simply duplicate into your own Google Drive, just make sure that you create a separate folder to put it in and that every item in the folder (and the folder itself are set to public access, or you can also make an entire folder access by specific email so you can then give that folder access to an investor and every file in it will have access for them).
Will you need all of this for a Seed round? Very likely no. However in our experience during diligence for an entire round you will end up with such and such asking for this and another investor asking for a different document which will culminate eventually in all of the following.
So even just having a bare template of a 25% of the following (what you have already and what may take 1-2 days busting ass to create), will lead to better investor engagement and trust in you as an entrepreneur.
Excel Sheet Resource: https://docs.google.com/spreadsheets/d/1g75nTCc9IwiA2X_t7579dbmevtiAFZhwqdwVamnejT8/edit?usp=sharing
“Average” Data Room Contents:
1. Expanded Company Pitch Deck
Presentation diving into detail on the company’s business model, expansion, etc. We often call this the “expanded” deck in that a regular intro deck is 10 slides and the expanded deck is often 30-40.
However, these are not “designed to impress”, but focused on more bullet points and a deeper dive into the model, yearly objectives, team member bios, channel strategies, ad / brand creative, strengths/etc.
The expanded deck is also typical if you are raising $1M or more, or going after investors investing $500k or more in individual checks as these firms will expect this deep level dive.
Largely much of the expanded deck is “strategic” and business plan focused that coincides with largely being a “really long use of funds” slideshow that shows how you will use the money to grow in each department and area.
2. Company Documents
- Amended & Restated Articles of Incorporation (all versions)
- Voting Agreement(s)
- Investor Rights Agreement(s)
- First Refusal and Co-Sale Agreement(s)
- Stock Purchase Agreement(s)
- Capitalization Table
3. Board Materials
- All board meeting minutes
- Board consents and actions
4. Financial Models
- Monthly P&L
- A pro forma for the next year
- Use of funds
5. Term Sheets & Previous Raise Docs
6. Market Research
- Market studies
- Competitive landscape
- Regulatory environment
- Go-to-Market strategy
- Sales process
- Sales pipeline
- Sample sales materials (one-page slicks, etc.)
- Important customer contracts
- Important LOIs or other indicators of interest from potential clients
- Customer ARR & MRR
- Branding guidelines and vision
- Marketing strategy
- NPS (Net Promoter Score)
- A list of all employees with date joined, title, and salary
- Future critical roles and hires
- List of contract workers and firms
- Hardware (ie, pricing, vendors, factories, technology, etc.)
- Software (ie, System Architecture Diagram, API Documentation, etc.)
- Product road map
- Product Backlog export or release map
- Screenshots of existing products
- Wireframes of future products
12. Historical Information on Past Raises
- Legal documents
- Past term sheets
13. Intellectual Property
- Granted and filed patents
- IP strategy
Pre-Seed companies WILL 100% very likely not have the above so don’t have a heart attack when you see what is on the diligence checklist. Focus on creating a data-room in which you can put what you HAVE, and add materials as investors ask for them or you have time to build them out.
Seed companies WILL 50% have some of the above if they’ve raised institutional capital or from professional investors. What I’ve always recommended was bring in team on weekend for deep strategy session to really outline business plan in a business plan tool for the strategic parts.
DUE DILIGENCE IS ABOUT INVESTORS TRUSTING IN YOUR TEAM’S ABILITY TO EXECUTE:
Is the team capable of making it happen?
Is the team experienced in this market?
Do you have momentum (not just traction but is it growing at a rate of X)?
Is it legally put together/no founder/cofounder/investor or legal issues?
Incorporated in delaware, clean cap table, no issues, etc.
Is there a market opportunity here or is it 1 of a 1000 doing same thing?
Do you know the competitor landscape?
KPI’s, cost of acquisition, customer lifetime value?
Do you understand the market size?
Does strategic roadmap exist or make sense
Do you have an actual plan or are you winging it?
Does your roadmap make sense / is it possible?
Do you have a hiring plan/deeper use of funds plan
Your goal is to not send “tons of stuff” but to convey in your pitch, materials, and data-room that you can execute on the plan you present, and that you will provide a future EXIT and return on the investors investment in an X multiple of what they give you – that is the whole point of investing.