Founders get ready for a raise by making a deck. Investors decide by checking whether the story in the deck holds up against the numbers, the market and the team. Most raises lose momentum in the gap between those two things.
Before a raise starts, we go through seven areas with the company. None of them are exciting, and all of them are cheaper to fix before the first meeting than in the middle of diligence.
Narrative
Now: Evidenced
Tie every claim in the story to a number or a fact in the materials.
Pick where you are on each line and this shows what usually gets you to the next step. It's a checklist, not a score.
Label every number
The most useful habit we push is marking every number by where it came from. Measured means it comes straight from a real system. Calculated means it was worked out from measured numbers, and the method is shown. Assumed means it is a forecast or an estimate.
It makes the company figure out which of its numbers are real, and it shows investors that the team knows the difference.
A model that answers questions
The model should answer the questions investors ask, quickly. What happens if growth is half the plan? How many months does this round buy, and what gets done with them? Which assumption breaks the plan if it's wrong? If you can't answer those in the meeting, you have a spreadsheet, not a model.
A short, ranked investor list
Long investor lists are easy to buy and mostly useless. A useful list is filtered by stage, sector, check size, location, strategy, portfolio and how well you know them, then ranked, so the first meetings go to the people most likely to lead.
Run the process on purpose
Order the meetings so feedback from one improves the next, write down every conversation, and have the data room ready before anyone asks for it.
None of this guarantees a round. It just removes the avoidable reasons a good company loses one.
Notes
- Zeutara is not a registered broker-dealer, doesn't give investment advice and can't guarantee the outcome of a raise.