first round funding for start up businesses

The Investor Checklist: Everything You Need to Prepare for First Round Funding

As a startup or small business, you will eventually reach a point where you grow beyond your current means and reach the next level of success and growth. This can be nearly impossible without some form of outside funding. The early stages of your company typically involve a lot of bootstrapping, which is defined as founding and running a company using only personal finances or operating revenue. When it comes time to seek first round funding, it can be quite the intimidating process. To make matters worse, only 3% of startups receive funding. So, how do you stand out in those first-round funding meetings?

It starts with detail-oriented due diligence and ends with a good CFO who knows the ins and outs of the funding world. Due diligence is a systematic way to analyze and mitigate risk from a business or investment decision. It involves examining the company’s numbers and comparing those numbers over time and benchmarking them against competitors. It will determine whether a venture capitalist or any other investor will want to invest in your company, making it very important to have due diligence in order.

Seeking funding is not going to be easy, but we know your business is worth it, and we can help you be as prepared as possible going in. The key to securing investment is a flawless business plan—and we mean literally flawless. It needs to be extremely detailed, accurate, and realistic.

Your business plan should include the following:

Executive Summary:

This should be a brief overview, no more than a few pages, of all the documents in your business plan.

Pro Tip: Consider why this investor would be interested in you and pitch to that. All investors are not made equal, and you will be happiest where there is mutual respect and trust.

Business Overview:

This should include your legal structure, the history of your business and how you were formed, your type of business, your location, and how you conduct business (e.g., storefront, mail order, e-commerce, etc.).

Pro Tip: Run a financial audit to make sure you are spending your money wisely.

Operations Plan:

This should describe how the business runs. Be sure to include a breakdown of any physical elements (e.g., machines for manufacturing), well-documented processes for everything you do, and role-specific responsibilities.

Pro Tip: Be sure to include a few ideas for exit strategies. Some investors prefer to know their exit options going in.

Market Analysis:

This should look at the market you compete in, as well as your target demographic and how you plan to cater to them.

Pro Tip: Be realistic. Anticipate the problems you face in your market and discuss potential solutions. Being too optimistic in your analysis is a red flag to investors.

Products and Services:

You need to write a detailed description for all the products and services you offer. If you are planning to add or discontinue products or services, be sure to clearly mark what is new.

Sales and Marketing:

This should outline your pricing and sales information. Make sure to include why your customers will buy the product and your marketing strategies.

Competitive Analysis:

This is your chance to analyze your competitors and explain how you will beat them. Be wary of downplaying your competitors’ strengths or overstating their weaknesses. It is okay to have strong competitors, as long as you have a plan to beat them.

Management Team:

This is a crucial part of your business plan. A strong leadership team can often make the difference between success or failure. Do not skimp on the details, but make sure all the information you provide is relevant.

Pro Tip: If you have done your research on the investors you are meeting with beforehand, you can emphasize commonalities between your team members and the investors to form a subconscious connection and make yourself more memorable.

Financial Plan:

This should include all your financial information. If you are not sure what that means, give us a call. At the end of the financial plan, you should list the following.

  • Start up or maintenance amount needed
  • Overhead costs for the next one, three, and five years
  • Planned use of funds
  • Anticipated funding needed
  • Ongoing expenses: salaries, insurance costs, advertising, etc.


You will need to provide projected income statements and balance sheets for two to three years. This will show the investor how much you anticipate making with their funds, so it is extremely important that these projections are accurate and realistic.

Seeking funding is an exciting time in any business’s life cycle, but it requires a carefully plotted pitch and meticulous financials. Your business plan needs to be perfect and it is important to hire an expert that will get the job done right.

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