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What Does it Mean to be "Funding Ready"

10/3/2018

 
We define "funding ready" as your company being legally, ethically, and procedurally ready to accept investor monies. That includes:
​

"Everyone" Raising Money

SEC EXEMPTION
You know under which SEC Exemption you're raising money. All private company securities offerings (which includes both debt and equity offerings) must be either "registered" with the SEC or have an exemption from registration. There are significant differences in how (and when) deals may be communicated and who may invest depending on which Exemption is used. We typically see 506(b), 506(c), or Regulation CF deals, but there are many others. ​
SECURITIES ATTORNEY
You have a securities attorney to represent your interests. Beware any investors or advisors that claim you don't need legal counsel. You do.

IF TARGETING ACCREDITED INVESTORS

INVESTOR PACKAGE:
​BUSINESS PLAN
While we don't really believe in the full-on traditional "business plan", Investors will expect to see:
  • Pitch Deck
  • Executive Summary
  • Risks & Mitigations
  • In addition to the typical business plan items, we require a completed Px8 Impact Assessment.
  • Maybe a PPM
  • Maybe a Video
And they'll expect you have a detailed Ops Plan including Objectives, Tactics, Projects, Milestones, Deliverables, KPI's, but only some will want to see that.
INVESTOR PACKAGE: FINANCIALS
Financials should include:
  • Actuals and Forecasts on the same page
  • Profit & Loss
  • Balance Sheet
  • Cash Flow Statement
  • Sources and Uses of Funds
  • Project IRR
  • Current and Pro-Forma Cap Tables
  • Valuation over Time
  • Waterfall Payments Schedule with Pro-Forma Investor Returns
  • Financial Narrative
INVESTOR PACKAGE: OFFERING
  • Term Sheet
  • Definitive Legal Agreements (i.e. the contracts between the entrepreneur and the investor)
  • Form D in progress, to be submitted to the SEC on completion of the financing round
  • an Escrow provider to handle the closing transaction, including gathering signed closing documents, accepting incoming wires, and disbursing funds
  • a loan or payment processing Servicer, if you expect ongoing payments from you to the lenders or investors.
DUE DILIGENCE DATAROOM
An online due diligence data room available to potential investors, containing the nitty gritty of DD documents.

IF USING A CROWDFUNDING PORTAL

If you are fundraising through a crowdfunding portal your deal must be live on the crowdfunding site before we can consider - or circulate - it. Each portal has their own requirements for content.

Care to test your Fundraising Readiness? As part of our Advisory Services we help firms understand the gaps between where they are and where they need to be. One tool we use is the Foodshed Investors Fundraising Readiness Assessment. It is free to use for self-assessment. If you'd like help understanding your results, please see our "Advisory" section.

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  • Advisory
    • Funding Readiness
    • Virtual Biz Partner
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    • Innovation Center
    • Request Consult
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    • Farmer Funding
    • Apply For Funding
  • Invest
    • Everyone
    • Accredited
    • Syndication
    • Register
  • Offices
    • Austin - HQ
  • Portfolio
  • About
    • Who We Are
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