What to Include
This section provides investors with a clear understanding of how much capital is needed, why it’s needed, and how it will be allocated. It highlights the specific areas where their investment will be used and outlines any strategic milestones.
Core Elements:
- Total Funding Requirement: The amount of capital you are seeking from investors.
- Equity Offering (if applicable): What percentage of ownership you are offering in exchange for funding.
- Funding Phases: Breakdown of how funding will be used over time, typically broken into stages (e.g., Seed, Series A).
- Use of Funds Breakdown: Detailed explanation of how the money will be allocated (e.g., product development, marketing, hiring, etc.).
- Milestones: What business objectives or operational goals will be achieved with the funding.
Where to Source the Information
- Budget and financial projections: Use your internal financial model to calculate the capital needed at each stage.
- Roadmap or operational plan: Break down funding needs by phase (e.g., product development, go-to-market).
- Strategic goals: Align funding with achieving specific milestones (e.g., scaling operations, entering a new market).
How to Analyze
- Determine total funding needs: Consider operational costs, marketing expenses, product development, and hiring.
- Match funding needs to milestones: Identify the stages at which you need capital and what you aim to accomplish with that capital.
- Investment structure: Ensure that the terms of funding (e.g., equity offered) align with investor expectations and business needs.
- Scalability: Assess whether your funding request aligns with expected revenue growth, ensuring that the funding request is realistic.
Format and Structure
- Funding Requirements: Present the total amount needed in a clear, concise table or bullet points.
- Use of Funds Breakdown: Create a pie chart or table showing how the funds will be allocated.
- Funding Phases and Milestones: Outline the phases and the milestones that will be achieved with each round of funding.
- Narrative Analysis: Provide a short description of why each area of investment is critical to your success.