Seed to Series B Fundraising Timetable
Planning an Equity Fundraise.
Undertaking successful equity fundraises are critical to most startups and scaleups. You should allow a minimum of 3 months for most funding rounds, and sometimes rounds can take much longer. There are times in the year - such as the summer and over Christmas - where it can be difficult to get investors attention. So its important to think about when you start your initial outreach and when you plan to close your round.
We've set out a fundraising timetable below, to give an illustration of how to plan for your next funding round, including the main milestones and activities you may need to undertake.
Seed to Series B Fundraising Timetable
Month 1: Preparation
Month 2: Investor Reach Out
Month 3-4: Term Sheets & Negotiation
Week 1-2: Define Objectives & Targets
Decide upon your target fundraise amount:
- How much do you need:
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how funds will be used & what needs to be funded
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desired runway from fundraising (typically 12-18 months)
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How much can you get:
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traction: how much revenue or proof of concept has your company achieved
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strength of your investment network / any cornerstone investors
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prior experience of team
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Create draft Investment Deck & Financial Model
Week 2-4: Reach out to Inner Circle for Initial Feedback & Validation
Get friendly feedback on your fundraising plans, to ascertain whether they are sensible:
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Contact potential investors or rounds leads that you know well
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Contact potential fundraising advisers
Iterate your plans if they are out of kilter with what may be most appropriate.
Week 4: Create Simple Data Room
Create a basic data room, which you can share with potentially interested investors. This should include:
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Financial Model & Investment Deck
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Recent financial performance: monthly management accounts
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Statutory accounts
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Key contracts: suppliers & customers
Early on in a round, it is unlikely investors will sign an NDA. So, only share information in your basic data room which isn't too commercially sensitive.
Week 4: Submit EIS Advanced Assurance
If your company is based in the UK and you have capacity for EIS, then create & submit your EIS advanced assurance application now. It can take a number of weeks for HMRC to process, and you don't want it holding up closing your funding round later on.
Week 3-6: Identify potential investors and start to build out a CRM
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Review online sources, such as Crunchbase and reports of other completed funding rounds to create a list.
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Identify warm intros via LinkedIn and your network.
If you've appointed an adviser, they can assist with a lot of the heavy lifting here. But it's always wise to manage your own database of investors contacts too.
Week 4-6 : Try to find a lead or cornerstone investor from your network.
Try and identify 10-20% of the funding round from your existing shareholders and/or network if you can. This cold really help with your outreach to other investors.
Week 5-6: Start Initial Outreach
A warm intro is worth 10x a cold intro. And a well crafted cold email is worth 10x a generic introductory email.
Take the time to do research on potential investors, and try to identify a relevant touchpoint in your initial communication.
Week 6-10: Investor Calls & Meetings
Be prepared to hear "no", a lot. Also, it is very difficult / almost impossible to convince a potential investor to change their made if they have said "no". Spend your time exploring other avenues and contacting new investors.
You will have to hustle a lot. It will be painful at times. But it is a numbers game, so the more contacts you make, the better chance of success you have.
Through this process you may also begin to settle on a valuation for the round, based on the level of interest from investors.
Week 8-12: Investor Due Diligence
Investors will explore areas of your business in more detail, and may have chats with the senior exec team, board members and existing lead investors.
Week 12-14: Review Term Sheets
Investors will provide term sheets for your consideration. Review and negotiate these carefully. At this point you may want to appoint a law firm to assist with your negotiations.
Week 14-18: Close the Round
Finalise the key investment documentation:
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Shareholder Subscription Agreement
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Articles of Association
Collect funds, issue shares and update Companies House.