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The ask - fundraising

How you should outline what you need from investors to make your business/idea a reality.

In this last module of the course we will focus on the part of asking investors for funds, what we call the Ask. Be honest and thoughtful. Investors want to know that you are asking for the right amount of money to take the company to the next stage.

If you had previous funding rounds, show the information of these rounds to the new potential investors, such as the name of the existing investors, the amount of investment, dates, etc.

Investors would like to know why you want to raise that amount of money. Investors want to understand what you are going to spend their money on. It is therefore very important that you have defined the milestones you expect to achieve with that money. Milestones are objectives that are set for the business, with dates and the person or team responsible. The earlier the stage of your startup the more your focus on milestones will be thesis based, essentially in/validating something. Later stages such as series A and series B are much more about the numbers.

Also show in your pitch deck how many months this new funding round will cover. This is known as runway and is usually calculated by dividing the current cash position by the burn rate. Let's talk about the burn rate. That's what you spend every month. But now you're raising again and probably by a lot more money than you raised before with the expectation that you're going to grow much faster. Growth has a cost. So, keep in mind what new expenses and revenue you expect to generate when calculating your runway correctly.

Finally, although you don't need to show it in your pitch deck, this is an issue for later negotiations, you need to know the value of your startup and what percentage you will have to hand over in exchange for the new funding.

A valuation will allow you to manage your expectations, to have a point of reference when starting negotiations with investors who show interest in your pitch deck (we already told you that a great pitch gets the first but also a second meeting) and to understand the key elements investors take into account when valuing your startup.

If you want to avoid unsuccessful negotiations with investors due to discrepancies in the value of your startup, you can obtain a professional and transparent valuation report in a very simple way (no financial knowledge required!) that will serve as a starting point for your negotiations.

I want to know the value of my Startup

Key concepts:

  • Startup Valuation
  • Milestones
  • Runway / burn rate