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Be ready for business. Be ready for Series A.

How we raised $11 million in less than six weeks.

Step 1: Planning

As with any great project, preparation is key! The initial planning took place internally where we created our story and pitch deck as well as our preferred exit scenario. It is important to discuss and agree on a preferred exit scenario (if any) with the existing shareholders at this point and the pitch deck should incorporate such key terms (that are important to you) such as valuation, election of the board, veto rights, vesting, drag along/tag along etc. Don’t forget to set a realistic timeline.

“Where do you see your company and yourself in the coming decades?” 

Key tips at this stage: 

  • Only way not to get or appear desperate is:
    1) start raising long before you need it; and
    2) have a plan A, B (bridge) and C (postpone).
  • Prepare all material including anything that an investor might want to see
  • Investors have their own internal processes that you will have to take into account in your planning 

“The best way to have a predictable outcome is to understand the process” 

Step 2: Term Sheet

When we had captured the interest of our potential investors, we created, negotiated and signed an NDA and Term Sheet with them on PocketLaw.

“Set your goal, break it down in steps and plan backwards”

Step 3: Due Diligence

Next, came the traditionally time consuming part of the transaction. As we had all of our legal, financial, administrative and operational documents stored on the platform, our investors had quick and easy access to the necessary information when they were carrying out their in-depth investigation into PocketLaw to understand our business and market. The PocketLaw platform proved to be an efficient and advantageous data room as we had full control over access at any given time. 

In addition to the legal (corporate, employment, IP and customer contracts) documents we had created and stored on the platform, our investors had access to our financial and operational documents including our historical P&L, forecast and budget which made it easy for them to follow the progress of all of our key metrics. 

Key tips at this stage: 

  • Identify and rectify (within minutes instead of weeks) any issues (e.g any missing operational or administrative paperwork) within your company before the due diligence process to reduce the risk of investors negotiating a lower valuation.
  • The investment team needs to be able to pitch your company (AND you) to their team. Make sure you give them what they need.
  • Appearance counts. Having everything in order would increase confidence and valuation. 

“Everything should be prepared strategically, thoroughly and well in advance”

Step 4: Negotiations

We were able to negotiate all of the transaction documents with our investors via the commenting feature on PocketLaw. We were also able to speed up the internal feedback process with all of the relevant stakeholders via the same instantaneous tool. 

Key tips at this stage: 

  • Control the process and maintain momentum. There is a direct correlation between the speed of your fundraising process and the probability of actually getting funded. Put in the time, solidify timelines and commitments and most importantly, do not let the deal go stale.

  • Know your bottom line. You are building a great business. Investing should feel like a privilege. However, there is a difference between being assertive and being aggressive. Your investor will (hopefully) be a long term, strategic partner and it is therefore better for everyone if the relationship starts off on a good tone. 

Step 5: Completion

Time to celebrate! When we had finalised our round, we were pleased that the process clearly demonstrated to our investors:

  • the suitability of documents available on our platform
  • the functions of our platform as a data room for our investors, template creation source for all necessary documents, collaboration tool (both internal and external comments), e-signing software and contract management system with storage, reminders and task delegations.

Key tips at this stage: 

  • Do not forget the post-completion tasks. It is easy to get caught up in the moment celebrating and forget about admin and paperwork. However, investors will be keen to ensure that their investments have been properly documented and reflected in the company’s records. Make sure these are done as soon as possible.

  • Maintain communication with your investors. The relationship you have built with your investors does not end once the round is over. It should be the beginning of a (hopefully) long and fruitful partnership. You should leverage their expertise, connections and help whenever possible to facilitate your growth.

Key takeaways

The fastest way to fundraise is…

  • Understand the fundraising process to maintain control, speed and urgency every step from coffee to money in the bank.
  • Be very well prepared to “sell” the company and your vision (from story, to metrics, to legal documentation)
  • Leave nothing to chance. Failure is not an option so make sure you have a plan A, B and C. And if you think you need 5 meetings, book 25.