HOW TO USE CROWDFUNDING IN YOUR FUNDRAISE

Standard of Practice for Entrepreneurs Seeking Funding

For those who seek funding here are some best practices to consider during your efforts:

Develop a relationship with investors early on.
Make sure you talk with investors and start developing relationships now. By building a relationship now and keeping the investor informed of your progress, the entrepreneur will be in a better position when it comes time to raise the funding.

Have ready the executive summary, slide deck, and business plan with financials.
Have the core documents – executive summary (one-page only), slide deck, and business fully developed. As the entrepreneur meets prospective investors, he can use the relevant docs for each meeting.

Publish a periodical email newsletter for interested
investors.

If possible, send weekly emails to show progress in sales, product plans, and other milestones. This shows the company’s ability to execute.

Find a lead angel to develop a terms sheet and start
the funding round.

By finding a lead angel and creating a terms sheet, the entrepreneur removes the most significant barrier to fundraising – the negotiation process.

Make the deal terms “investor friendly.”
Every deal must be negotiated. By making the terms “investor friendly” through reasonable pre-money valuations, preferences, and other terms, the faster the process goes.

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