{"id":338,"date":"2020-10-14T01:27:00","date_gmt":"2020-10-14T01:27:00","guid":{"rendered":"https:\/\/marshallbrain.com\/wordpress\/?page_id=338"},"modified":"2020-10-14T01:27:00","modified_gmt":"2020-10-14T01:27:00","slug":"invest8","status":"publish","type":"page","link":"https:\/\/marshallbrain.com\/invest8","title":{"rendered":"How to Raise Money from Angel Investors and Venture Capitalists – Chapter 9"},"content":{"rendered":"\n

Quick Recap of the Steps<\/strong>
by Marshall Brain<\/a><\/p>\n\n\n\n

Let’s review the steps we’ve discussed in the previous chapters. The steps that a company typically takes to raise money from angel investors or venture capitalists look like this:<\/p>\n\n\n\n

  1. You find a point of entry for the angel group or VC firm. You make sure that the group\/firm is interested in investing with a company like yours and your company’s stage. You meet someone who can provide you with an introduction so you are not submitting your application as an unknown company.<\/li>
  2. You apply, providing things like a business plan, a description of your management team, and a Power Point deck.<\/li>
  3. A screening committee looks at your application. Since you were referred in, this is usually a formality. Typically the screening committee is makiing sure that your company is not a Lifestyle company, that your company matches the profile sought by the firm, that you have an exit plan, that the market is large enough, that you have a qualified management team, etc.<\/li>
  4. The executive committee or firm schedules a first face to face meeting.<\/li>
  5. Typically at this first meeting you will do a presentation using your Power Point deck.<\/li>
  6. An angel group will have an open discussion after your presentation and vote yay or nay on moving forward.<\/li>
  7. Due Diligence part 1 – the 100 to 200 point questionnaire.<\/li>
  8. Due Diligence part 2 with interviews of customers, references, employees, tech, etc.<\/li>
  9. Having examined the results of Due Diligence there is a second vote.<\/li>
  10. The exec committee produces a term sheet. It will state a valuation for the company, the amount of money the firm plans to invest and any conditions – board seat, observer rights, monitoring, etc.<\/li>
  11. If the term sheet is agreed to by both parties, legal documents are drawn up.<\/li>
  12. Once the legal documents are signed, money is wired into your company’s bank account. The relationship with the investor begins in earnest.<\/li>
  13. There may be more funding, series B, C, etc.<\/li>
  14. You move your company toward your liquidity event (acquisition or public offering) which provides your exit for investors.<\/li><\/ol>\n\n\n\n

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    Raising Money Table Contents<\/h2>\n\n\n\n