What documents to show investors at different stages

What documents should business owners present to investors at different stages of the business? This is one of the most important question to solve before embarking on a fundraising round or an exit. It can also save money and effort, as well as enhancing your confidence in front of investors when you’re going through this process. There are many different types of businesses, stages and investors.

I have seen founders prepare a different type of document for every investor they meet, which can be needed sometimes: if you have a good lead and a potentially large investors, it can be worth preparing a customised document especially for the situation. But when different brokers may ask for vastly different documents, it can be a sign that you’re contacting investors who are quite different from one another, and some of whom might not specifically invest in your type of company. In this case, you might need a more focused financing strategy.

Investor-ready documents, as well as other requirements, might also depend on the sector of the company and the geography. Often, it might vary based on the sophistication and the experience of the specific investor. Just like an investor who typically invests in small deals might not know what to look for in the due diligence of a large company, so can experienced financial consultant be hired an early-stage VC and go completely overboard with the requirements. That’s why there is no one size fits all, but the more we are approaching sophisticated funding rounds (such as Series A and onward), the more the standards of investment become set and more widely recognised. In startup hubs around the world we can also see increased sophistication, higher (but feasible) requirements in the documents requested, and also more standardised requirements by different investors. Sometimes we can also find countries with a good economy, but lacking an advanced startup hub with knowledge of startup investments, and inversely, there are also developing countries with fast-growing startup hubs that adapt to international investment trends in early-stage companies.

The definition of company stages can also change across sectors and countries. For example, we have seen early-stage rounds become larger and larger, to the point where the new Seed stage has become the previous Series A in the past few years, requiring higher validation KPIs, revenue, and valuations. This is especially true in startup hubs, whereas in weaker economies and with a shorter history of startup financing, the term ‘Seed’ stage may still refer to companies at the pre-revenue stage.

Here is a quick overview of what you need to prepare (or requirements to expect) at different stages:

SMEs/ NON-STARTUP or not scalable (any stage)

ANGEL/ PRE-SEED

SEED & SERIES A

SERIES B and following

PRIVATE EQUITY or FINANCIAL INVESTOR EXIT

STRATEGIC INVESTOR EXIT

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