What Information Do I Need to Share for a Capital Raise?

You may hear stories about businesses that raise capital after one meeting, with terms agreed to on the back of a napkin.  Those situations are the exception, not the norm.  Most capital raises require entrepreneurs to share a lot of intimate information about their business with investors.

Trying to assemble information mid-process can be chaotic.  We always recommend folks get their information organized in advance of formally launching a process.

What information will you need?

Investors need information on your business in order to determine if you fit with their criteria.  Here’s what you’ll typically need to provide before you get any indication of valuation from an investor.

  • A business overview
  • Sales and marketing materials that further describe your product/service offering
  • Historical financials for the last few years, including income statement, balance sheet, statement of cash flow (if available)
  • Projected financials
  • The current sales pipeline
  • Revenue by customer
  • Management operational reports or KPI dashboard
  • Employee census with title, salary, and start date
  • Capitalization table and funding history

While, investors may ask for additional information in order to better understand certain aspects of your business, the information outlined above is most of what an investor needs to discuss your deal with their investment committee.

Once you’ve negotiated the terms of a deal with an investor, they then move into confirmatory diligence.  During confirmatory diligence, an investor will validate everything you’ve told them up until this point.   It’s at this point in a capital raise process that you’ll be sharing a lot more information.  Investors will send you a diligence request list, which outlines all the information they expect to see.

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