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Steps To Streamline Final DD And Ensure A Smooth Closing Process
- Published December 12, 2022 7:24AM UTC
- Publisher Osama Hassan
- Categories Capital Raising Tips
By preparing the suite of financial and legal closing documents ahead of time you can streamline the final due-diligence and make the closing process more efficient 💥
This is the kind of game plan you can follow 👇
STEP ONE: Financial Business Model 📊
Make sure to include with your scenario planning a presentable, vetted financial business model, in spreadsheet form, for use by the investor.
Resources:
Financial Modeling 101: Tutorial and Template – https://lnkd.in/gCTYnHKa
Startup Financial Model example: Slidebean (actual) earnings and expenses – https://lnkd.in/gVxP3afJ
What startups get wrong about Financial Modeling – https://lnkd.in/gg_sqgV7
STEP TWO: Term Sheet 🗒️
Instead of waiting for a term sheet, have one ready to provide to interested investors. Having a binder of legal documents for closing is a good idea. And if you have raised before, be sure to supply the prior round’s term sheet and closing documents as well.
Resources:
The Economics of Term Sheets – https://lnkd.in/gF3nmbpt
The Most Important Points in a VC Term Sheet – https://lnkd.in/gpbiz6se
Understanding Investor Terms & Incentives – https://lnkd.in/gX2EShTP
STEP THREE: Deal Room 🔑
Now prepare a data room where investors and their own lawyers can review your historical documents, as well as financials, important legal contracts, market studies, etc. In the past, startups actually had to have a room full of binders, whereas today this can all be setup in a digital destination.
For this step, Wholesale Investor‘s CRIISP deal room is worth checking out. Here’s what actioning this step looks like: https://lnkd.in/gDbfy-gE
The insights generated through the data-room activities of investors is a valuable tool in bringing your fundraise to a successful close 🙌
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