The documents you will need depend on the stage of funding you are in, and who you are approaching. If you are looking to raise money from a grant-making institution or an angel investor, you are likely to get away with a one-pager articulating your idea and why it is important now, as well as a pitch deck. If you are going to a private equity firm or a bank, you are likely to need a detailed business plan, financial projections, etc.
As this guide is geared more toward younger start-ups and first time entrepreneurs, we will focus on the documents they will need to show when going to investors.
Generally, they will want to see a comprehensive one pager that outlines a business idea and how the company plans to build a compelling product around this idea, outlining current and future challenges, and how to get around them. Entrepreneurs should also include a pitch deck — a set of slides that they can use to showcase their ideas, traction, and market opportunity to potential investors.
The one pager is an important document that every entrepreneur should spend time to get just right. This should be a mini-business plan, and should include a succinct overview of what the business is, what problem it is solving, and how you plan to turn your idea into an appealing product. Include charts, images (including your company logo), and graphs as much as possible; but, do not forget to clearly articulate, in writing, the purpose of your business and how you plan to execute it. This is a document you could leave behind so make sure to balance substance with visual appeal.
The second document every entrepreneur will need to prepare is a pitch deck. Singularity Investments, which invests in businesses in Africa and North America, recommends 10-12 slides in the following format:
- What do you do in 30 seconds (the elevator pitch)
- The Problem
- Your Solution (+ 1 slide here if you need it)
- Market Fit
- Market Size
- Business Model ($)
- Defensibility and IP
- Financials (only if it adds value)
Additional slides investors may want to see include: traction to date, use of funds and investment instrument sought, and exit route.
For both the one pager and the pitch deck, a small amount of customisation/tweaking to better fit the investor can go a long way. For example, if the investor is known for wanting to see how the investment may effect social or environmental change, add a slide (or at least a few bullet points) about how your start-up may do that.
Remember that as soon as you raise money, expectations will shift. It is no longer just your money and time. Investors will expect increased reporting and tracking, as well as formalized record keeping and the like. Do not be unreasonable, and do not make empty promises, but do come across as optimistic, hopeful, hungry, and ready for the increased scrutiny of the business.