Structure an Investment Deal

Must read: Venture Deals. This book is considered the best thorough resource on the process from start to finish. Even with the help of lawyers and consultants, understanding the deal terms and journey is critical for any business person making decisions.

Raising money is a key step for many startups. Ideally, companies would make enough income from the start to not need outside investment, but that’s not often realistic. Scaling product, systems and staff takes resources. Capital can provide runway to do that while giving investors a stake in the company’s success.

Fundraising is a time-consuming process- expect anywhere from a month or two to a year and multiple rounds over time. When actively raising, expect to spend about 40-60 hours of time on meetings, coordination, document preparation, pitch prep and presenting, networking, and time spent with potential investors. If you are traveling to various locations to raise, double the time estimate.

Walk in with clear proposals including cap tables. The goal is to be given proposed term sheets. Venture Deals walks you through how to evaluate them, common elements and pitfalls, etc.