Jeb Altonaga of Clearglass Capital Partners shares his thoughts on capital raising.
You may be looking to raise just $400k which does not need the same level of marketing materials for someone raising $40M should be putting into place. If you are raising $400k you may get it done with just one to four investors or maybe up to ten investors. These investors may be putting in smaller amounts in real terms but also smaller amounts as compared to their total net worth.
Typically, smaller allocation decisions can be made faster, with moderate due diligence, and many times these check sizes don’t require sign-off from an investment committee, publicly-traded entity, or a board of advisors. While meeting in person is required less than ever for closing small to medium-sized investments, nothing beats a strong in-person relationship and introduction. Allocations right now seem to be going to those who are excellent at using digital tools to close deals but also to those who are aggressively meeting in person. Those who use some digital platform but aren’t very fluid in it, are not making the same progress. Many managers report growing faster than ever before during COVID. At each level from $0-$1 million from $1M-$10M, $10M-$25M, and $25M+ raises there are different checklists of materials and strategies to put into place. Below is a set of checklists of materials to consider having in place for these various sizes of raises.
One-pager on the deal detailing the team, terms process, location and the offering visually (not a one-page memo of pure text). Short 12-page pitch deck if time permits. Short 2-4-minute video from the founder on the deal for texting and embedding in the one-pager and pitch deck and the summary pitch. A one-liner on the investment offering.
Everything above +: Timeline of track record and development of the strategy. Drone video of the asset or walkthrough video or 3D modelling of the product or device. A simple website and a logo that doesn’t look like high school clip art or a weekend job slanting coloured text in PowerPoint. Create something professional. Professional headshots of team members and assets. A brand name that makes sense and tells clients or investors why they should work with you.
Everything above +: Materials that can be mailed to prospects for follow up, investor newsletters, shock and awe box, a folder of educational materials, or a book. Have a data room. Consider using a whiteboard explainer video. Consider engaging with an outsized firm to help add institutional polish to your materials. Invest in a CRM, it’s a critical software piece. Consider structuring multiple membership classes or a partner to gain an anchor investor or appeal to investors of different sizes. Strategically secure an industry-recognised name to invest first or invest a large check to add to deal momentum.
Everything above +: Master Due Diligence Questionnaire (try AIMA). Documentary-style interviews with clients, investors, and founders, 7-15 minutes in length. Consider publishing an authoritative whitepaper or writing a book. Fully built-out data room for investors ready at any time. Strategically map out the investor clubs, meetings, and conferences and network/pay to speak at them. Third-party due diligence reports are in place from two third-party organisations.
I hope you found this checklist useful for which size capital raise you are currently in. Please let us know any questions you may have. If you need help implementing the above, please speak with our team, (firstname.lastname@example.org) to assist in your journey.