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Understand the fund raising process


Copy and fill in the Template.

Review the fund raising process map.

Fill in the task owner, proposed dates, and the weekly chart.
The process is an emotional roller coaster. It’s not done until it’s done.


Rob’s display board app for interior designers and architects was doing well. He was getting a lot of feedback and had some clear ideas for version 2 which would be visually stunning but would cost $300,000 to build. While he could wait for sales for the display board app to come come in, he was worried that competitors would copy his idea.
Rob knew the drill of putting the investment docs in place: presentation, business plan, project plan and forecast. He wanted to be seen as a business person, not just a hacker. He sent out initial emails to venture capitalists but they wanted over 50% of the business.
Rob decided to use his network of high net worth individuals who were in the design world. He reasoned that he could find 3-4 investors to put in $75-$100K and be able to help in other ways. He had initial meetings with each of 10 potential investors and demo-ed the display board app and showed what version 2 would look like. Afterwards, he sent a NDA and other investment documents to those still interested.  With the holidays coming, he wanted to get the deal done. Fortunately, he had enough investors interested to push the project forward.


Alex had started a running apparel business but needed more money to buy inventory. He sold to a large running retailer where product would sit for months and then sell out in one month. Alex had prepared all the documents: presentation, business plan, forecast and project plan. He met with the president of the large running retailer about prepaying, or a deposit, for product for six months. But, the president declined saying that they were having cash flow issues too.
Alex met with his fabric and printer supplier, but they passed as money was tight. While Alex was discouraged, his running buddy said he should see if other runners in the community would help. Alex organized a weekend fun trail run for 30 potential investors. He gave each participant a running shirt customized for this event. He made a brief pitch and handed out materials to interested parties. He guaranteed that all investors would get a lifetime supply of running apparel if they became investors. He would follow up in the coming weeks. Time will tell.


Courtney wanted to start a dance studio but did not have the money. She had a presentation, business plan, forecast and project plan. She asked friends what ideas they had for potential investors because she knew the bank couldn’t help. After getting feedback, here were the potential options: get 20 families to prepay for 3 years, ask the landlord to give 50% subsidized rent for the first year (his wife was a patron of the arts) and ask her partner Sally to invest $30,000 for another 10% ownership in the business.
Courtney sent out emails to related parties. She organized 3 events for 30 families at her home studio. After a lesson, she handed out the presell document. If parents would prepay for three years, their children will not have to pay any more dues until they turned 18.
Courtney then arranged a meeting with the potential landlord after sending him the investment documents. In the meeting, Courtney will push for how good the studio will be for the local arts community. If that did not work, she would be prepared to give up 10% ownership in the studio.
Finally, Courtney set up a meeting with her partner Sally about investing $30,000 more for another 10% ownership in the business. Sally had prepared the documents and knew the challenges they faced. Courtney knew it would be alot of work to raise money. But, she was well prepared.


FAQ & Resources

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What is a non disclosure agreement (NDA)?
A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA) is a legal agreement between two parties that outlines confidential material that the parties want to share with one another, but want to restrict access to other parties

What is a term sheet?
A term sheet is a non-binding document outlining the terms and conditions of a business agreement between two parties. This document is usually a precursor to formal legal agreements.



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