Basic Investment Materials You Need

Raising capital in the midst of running a business is challenging. Often it is the most important thing that you do and the one for which you are the least equipped. For many new ventures, the investment process is a constant scramble to put together new PowerPoint presentations, documents and financial information for every investor meeting that comes your way. It may seem as though each investor is asking for something unique or different than the last one, but preparing one-off packages and reinventing the wheel for every new meeting is incredibly time consuming and inefficient. In this lesson we help you create a standard set of tools once that can be used for all investment opportunities.

The hard part of the investment process is not only proving your model.It is the additional work required while you are running the business. By having standard tools that you create once, and a standard process that leverages these tools, you minimize the ad hoc work you have to do and can focus on the important job of communicating your value to investors. The goal is to develop the following set of materials that you build once and use over and over regardless of the investor. While you may not need all of these tools, and may supplement them over time, these tools should care for virtually all of your investment opportunities:

Mutual Non-Disclosure Agreement

A non-disclosure agreement (NDA) is a legal contract that protects entrepreneurs against the theft of their intellectual property since sensitive information may be disclosed over the course of a meeting or presentation with potential investors.

Entrepreneurs are encouraged not to present an NDA in the first meeting with their investors. Instead, their initial presentation and business plan should be tailored to exclude actual intellectual property or confidential information, but reveal enough to entice prospective investors into further evaluation of the company. Many angels firmly believe that entrepreneurs should be able to convey their ideas and opinions without giving away secret facts. Furthermore, business owners should be aware that disclosing too much information will not advance a business deal nor will it successfully gauge interest in probable investors.

Only in exceptional circumstances or during the due diligence process will angels consider signing an NDA. Any period before the due diligence process is considered premature.

Two-Page Executive Summary

This is a one page executive summary with the key highlights of the business. Few investors these days have the time or patience to read a full business plan, so a better way to catch their eye is with a tightly written and well formatted two-page executive summary.

The Executive Summary should cover all the key topics in a full business plan, including the following, in this order:

  • Significant Customer Problem and How You Solve It. This is your elevator pitch and customer value proposition, and is your key to getting an investor to read even the remainder of the summary. Skip any history lesson and your vision to change the world. Nice-to-have solutions and customers with no money are not compelling.
  • Large Market Opportunity. Investors expect to see credible third-party evidence that you are targeting a billion-dollar opportunity, with double-digit growth. Your passion is necessary but not sufficient to prove a market. Focus on a specific market segment to match your solution.
  • Your Unique Competitive Advantage. Patents or other intellectual property are a real competitive advantage for a startup, but first to market and working harder are not sustainable. Don’t kill your credibility by asserting that you have no direct competition, since to investors that means you have not looked or there is no market.
  • Business Model. If you sell for half the price of a competitor, but you lose money on each item, it’s hard to make it up in volume. Remember you are talking to investors, so they don’t associate free with providing any financial returns. Quantify all the key elements of the equation, including price, margin and volume.
  • Team. Highlight why your team is the best for this challenge. Make sure you name your key players and advisors, and include any prior startup experience and prior experience in the relevant business domain. Current and past titles don’t convey this information. Professional investors look for the right people more than the right product.
  • Financials. Project revenues, costs and investment expectations. If you are not willing to set targets for yourself, don’t expect investors to commit their funds. Major milestones along the way should also be outlined. When sizing your funding request, be aware of the value of your startup today, since most investors expect an equity share for their contributions.
  • Potential Investor Return. The best way to do this is to highlight a recent similar company payback to investors, via going public or acquisition exit. Angel investors look for high-growth potential companies who can double revenues yearly, and sell for a high multiplier, providing a 10-time return.

This outline is not a magic formula, but when key points are skipped, investors see these as red flags, which can push your request to the bottom of the pile A great executive summary shows the true depth of your character and your plan.

Here is another structure that delivers the same information in a slightly different format:

  • Company Overview
  • Market Opportunity
  • Your Unique Value Proposition
  • Customers/Market Presence
  • Your Team
  • Your Product/Service
  • Business/Pricing Model
  • Competition
  • Use of Proceeds
  • Financial Highlights

The Executive Summary should tell an investor all he or she needs to know to want to learn more.

Key Presentations

You need two key presentations to make your investment process efficient:

  • General Presentation :12-slide PowerPoint presentation that is the primary presentation you distribute when first interacting with a potential investor. It should be written in a font no smaller than 14-point. It includes the following slides:
    • Cover Slide (Logo, presenters and date)
    • Company Overview (Overview of company, What you do, highlight key wins, customers, successes, key points in history (founding date, key events, investments to date)
    • Elevator Pitch Slide
    • Market Opportunity (Size and importance of the market; Market problem and current solutions)
    • Your Solution (Product/service overview)
    • Competitive Advantage/Unique Value Proposition (Why your product or service is unique)
    • Team (Current team with backgrounds and roles • Include board, advisors and other assets)
    • Market Traction (call “customers” if you have them) • (Key customers, Other evidence of market traction)
    • Business Model (How you price your product or service, How you make money, Key revenue streams)
    • Competition
    • Financial Projection (Financial projections – summary • Financial metrics with investment (e.g., EBITDA, date of positive cash flow)
  • Detail Presentation: 21-slide PowerPoint presentation that expands on Presentation 1 and adds details on the various areas of the company.
    • Sales Strategy (Strategy for selling your product/service)
    • Pipeline (Pipeline of current sales opportunities)
    • Product Strategy (Strategy for differentiating your product/service)
    • Client Management (How you manage clients?)
    • Marketing (How you market your product/service?)
    • Technology (What technologies power your solution?)
    • Operations (What operations support your product/service?)
    • Finance (How is financial management being handled?)
    • Raise Details/Use of Proceeds (Structure of investment, Use of proceeds)

It should be written in a font no smaller than 14-point.

FAQ Document

Investors ask lots of questions and at times it seems that in the investment process you are responding to the different questions of different investors. In reality, 90 percent of the questions are the same. Prepare a FAQ document that:

  • Business Areas. Organizes the questions and answers into the common areas of the business (sales, marketing, product).
  • Top Questions. Provide questions and to at least the top five questions in each area. Feel free to provide more.

This FAQ document should be extensive and cover the major questions for each part of the business.

When an interested investor says, “We will have follow-up questions” wouldn’t it be great to say “We have a document that addresses a lot of these questions for you.” For example, in the area of “Team” the five questions might be:

  • Who are current members of the team, the Board and key advisors and what are their roles and backgrounds?
  • What is the current organizational chart and reporting structure?
  • What key team members do you need to add and in what order?
  • What do you see your role in the company going forward?
  • What are the compensation arrangements with current team members?

The objective of this document is to anticipate questions investors are likely to ask when they want more detail about the business. If you find a question is being asked repeatedly but is not included in this document, add it to the document. This document should address 90 percent of the questions and limit ad hoc work for you and your team.

Key Messages—One-Pager

This document is for internal use only. these are the key messages you are looking to communicate to an investor. No more than five key messages and no more than one page. The investment process can be new to you or your team members. Create a document that lays out the top five messages that you want to investors to understand. For example:

  • Differentiated business model
  • Key customers that are using your solution
  • High operating profit
  • Break even in eighteen months
  • Brand recognition with key industry players

Investors are dipping in and out of your world and if you can get you and your team aligned around core messages, it increases your chances of getting them to stop and listen.

Financial Model

Financial model (usually in Excel) with a minimum projection of three years, monthly projections for year 1, and quarterly projections for years 2 and 3.

List of References

A list of customers, advisors, and other significant resources with names, relationship to the company, and current contact information.

Standard Agenda

For interested investors, there will be follow- up meetings and calls. These meetings look for details on each functional area of the company included in Presentation 2. Create standard agendas that track the tools you have created. For example, a standard agenda for Follow-up Meeting 1 (Agenda 1) would track the slides in Presentation 2 and set out a three-and-a-half-hour meeting structure.

When a follow-up meeting is requested, communicate that you have a standard agenda and materials for the meeting that you would be happy to send out. You may not have all of the roles noted under “Presenter.” Adjust accordingly. You may also find that in specific areas there are additional follow-up meetings that request specific detail. These often include:

  • Team
  • Pipeline
  • Pricing Model
  • Financial Model

You can deal with these topics as they arise or develop short documents or presentations that address these areas with more details in the same process (i.e., standard agenda that ties to the presentation/materials).

Setting up a Data Room

We suggest that once these documents are created, you create a using an online document management tool (e.g., Box, Dropbox) that are often free or low cost. The data room includes the major documents of the company and additional items needed for investment. It is also organized around the functional areas in Presentation 2. For example, in the area of “Customers” it might include:

  • Customer contracts
  • Customer pricing documents
  • Customer profiles

A data room allows you to create one universe of documents that can be accessed by anyone with credentials. When you create new documents or tools, you add them to the data room. This data room may be created for the investment process but then can be leveraged by the company for all of its daily activities.


With a standard process, you can train your team on the documents, the process and the key messages you want to deliver. Hold training sessions with team members and rehearse their specific parts. With the Key Messages document as your guide, develop and train on messages that you want to reinforce in each area of the business.

A structured and organized process, with set tools, meetings and agendas, and clear messages, shows the type of discipline that investors value. When an investment process seems ad hoc, with days going by between asks and a scramble to put materials together, investors notice the lack of structure and discipline of the business. Don’t forget investors are always watching.