The Art of Startup Fundraising

Prepare for the investor due diligence process

Instructions

Collate all the items required on the due diligence checklist.
Create comprehensive folders on Google Drive or Dropbox that you can share easily with investors. Consult with your legal counsel to ensure all is covered. Some documents that may be included in your folders are your Certificate of Incorporation and bylaws, financial statements and audits, tax documents, employee policies, and benefits, etc.
Create your cap table using a simple tool or app.
You may try Captable.io, Certent, Sharewave, or Capshare. You could also hire an equity management company or talk to your lawyer about having one made for you.
Ensure your start-up is as clean as possible before investors request references and complete background checks.
First, settle any collection accounts or legal issues and rebuild any bridges you may have burned in the past. Then, ensure your social media represents a promising founder and request additional recommendations on LinkedIn and Google reviews. Finally, search your name, cofounder/keyworker names, and your start-up online. Check from different devices, browsers, and search engines. At least three pages should be positive. Make further improvements if necessary.
Prepare for a visit from the investor to discuss due diligence matters.
Make sure to prepare your answers to their potential questions, such as: How many people are on the team? How many shareholders are there? Who are they? How are you going to make money? Who are your main competitors? How much are you trying to raise?