This document provides information on startup funding. It discusses various funding stages including pre-seed, seed, Series A, Series B, and Series C. For each stage, it outlines considerations like the type of investors involved, average timelines between stages, and key factors to address when seeking that level of funding such as demonstrating product traction or a clear valuation. The document also provides a detailed list of documents and information needed for an investment data room to facilitate due diligence investigations by potential investors.
4. 4
THINK ABOUT !!!
ARE YOU READY TO SEEK FUNDING?
4
Financial Models
Projected Costs, Acquisitions, Sales And Revenue, Including
Your Profit Margins, Growth Rates And When You Expect
The Business To Become Profitable
Potential Customers
Prospective, Potential
Qualified, Guaranteed
Customers
MQL vs SQL
Brand Yourself
Generate Traction
Brand Is The Experience
You Deliver Customers
Your Team
Qualifications, Experiences, Education, and Background
5. 5
PRE-SEEDVS SEED
THE SECRETS
Angel Investors:
Angel investors tend to be serial entrepreneurs and investors who have expertise in
a specific field and are likely pretty passionate about it. They want to make money,
sure, but they are also often in the investment world for “love of the game.”.
Silent Partner:
usually just want to earn some passive income and not really be involved in the
day-to-day operations of the company.
Equity Crowdfunding:
asking a large number of people each for
a small amount of money
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6. 6
SERIES A
THE SECRETS
Step ONE:
Join an Accelerator // YCombinator.
Networking:
Networking early and often with influential investors, whether they are Angel
Investors or VCs from leading venture capital firms.
Micro-VS Connections:
Micro VC is a quickly growing category. ... deal flow and enable founders to
connect with other founders to help de-risk their own companies.
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7. 7
DATA ROOM // BE PREPARED
THE SECRETS
7
Due diligence investigations
Funding Process
والتعريفي االستثماريالملفInvestment Deck
الشركةمستنداتCompany Documents
للشركة والتجاري انونيالقالسجلCertificate of Registration
الحصصتوزيع جدولCapitalization Table
المستثمرينبين األوليةاقيةاالتفThe Term Sheet
والمعدلة المصدرةالتأسيسعقودAmended & Restated Articles of Incorporation
اقيةاتفالحصصمالكيShareholder Agreement
المستثمرينحقوقاقيةاتفInvestor Rights Agreement
الحصصشراء اقيةاتفStock Purchase Agreement
انونيةالقوالعقود المستنداتLegal documents
المستثمرينمع األوليةاقياتلالتف السابقةالمستنداتPast terms sheets
الشركةأخرىاقياتاتفأوعقود أيAny other legal agreements
8. 8
DATA ROOM // BE PREPARED
THE SECRETS
8
Due diligence investigations
Funding Process
المبيعاتSales
البيععملياتSales process
المحتملونالعمالءSales pipeline
المبيعاتلمواد نموذجSample sales materials
العمالءأهمائمةقImportant customer
اإلدارةمجلس موادBoard Material
االجتماعاتمحاضرMeeting minutes
الماليةالمستنداتFinancials
األخيرةللسنة الدخلائمةقIncome statements P&L for last year
النقديالتدفقبياناتCash flow statements
العموميةالميزانيةBalance Sheet
ادمةالقللسنوات الماليةالتوقعاتFinancial projections for 3 years
أخرىمالية مستندات أيAny other financials
السوقأبحاثMarket Research
السوقدراساتMarket studies
واألسعار المميزاتمع التنافسيةتحليلCompetitive analysis with features and pricing
9. 9
DATA ROOM // BE PREPARED
THE SECRETS
9
Due diligence investigations
Funding Process
التسويقMarketing
والرؤية البصريةالهويةاتملفBranding guidelines/vision
الفعالوخطط االجتماعيةالشبكاتمواد مثل التسويقمعلوماتادمةالقيات
Marketing information
الفريقStaff
الرواتبمع التحاقهموتاريخ ومناصبهم بالموظفين ائمةق
المخاطروخطط الشركةمناصب في المستقبليةالتوظيفFuture critical roles and hiring plan
ائمةقالموظفينبين العقودوالشركةAll employees’ contracts
التقنيةTechnology
النظامهيكلةSystem Architecture Diagram
البرمجيةالواجهاتمستنداتAPI Documentation
البياناتقواعد هيكلةDatabase Schema
التوسعخطةExpansion plan
اديهاتف وطرق المخاطرRisks and its mitigation plan
االصطناعيالذكاءأوالضخمةالبياناتتحليل أواآللةتعلم مثل خاصةاتمواصف أيAny details for
special topics such as AI, ML or big data
ومستنداتها والعتاد األجهزةصورHardware documents and pictures
10. 10
DATA ROOM // BE PREPARED
THE SECRETS
10
Due diligence investigations
Funding Process
المنتجProduct
المستقبليةاإلصداراتخصائصأوللمنتج الطريقخارطةProduct road map
الحاليالمنتجمن صورScreenshots of the product
الفكريةالملكيةIntellectual property
والمنتظرة الممنوحةاالختراعبراءاتGranted and filed patents
التجاريةالعالماتTrademarks
الفكريةالملكيةواستراتيجية خطةIP strategy
11. 11
SERIES B
THE SECRETS
Step ONE: Pitch Materials
Write a Financial Plan and a Pitch Deck
Then (MVP) Minimum Viable Product
(MMP) Minimum Marketable Product
(MMR) Minimum Marketable Release
(MMF) Minimum Marketable Feature
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12. 12
SERIES B
THE SECRETS
Be Ready: Your Numbers?
Series B funding is the most challenging round for a startup company.
Step ONE: Show Strong Achievements
Step Three: Engage Lawyers
Engage specialized venture capital lawyers if you haven’t already. You’ll need their
expertise to:
Agree on business valuation
Negotiate investment terms and prepare a term sheet
Draw up contracts
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13. 13
SERIES B
THE SECRETS
Step Four: I am Ready?
I have proven that I can become one of the market leaders
I have proven that I can recruit and retain quality talents with a strong corporate
culture
I can show that the story is just starting
Each fundraising is unique
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14. 14
SERIES B
THE SECRETS
Step Five: Healthy Growth
You should master the following topics with data points:
CAC: what are the acquisition channels? What’s the Sales cycle (of every channel)? What is the CAC by
channel? - Customer acquisition cost
LTV: what’s the margin per client (with client segmentation: by type of client, geo etc.)? How do you
generate repeat and upsell in order to get a healthy LTV/CAC ratio for each channel (payback <12 months,
LTV/CAC > 3x)
You have demonstrated that several paid acquisition channels work well and are scalable at the moment
you raise the Series B
Your net churn is ideally very negative, negative or close to zero. Visual impact of churn on your revenues
below.
14
Net Negative Churn is achieved when the total additional revenue generated from existing customers is
greater than the revenue lost from cancellations and downgrades. When your recurring revenue grows
without the addition of new customers, you're achieving positive net revenue retention.
15. 15
SERIES C
THE SECRETS
Later-Stage Investment: Go, Go, Go
A Series C Funding Round generally occurs to make the startup appealing for
acquisition or to support a public offering.
A Series C Funding Round can be when you have
A clear and reliable valuation of your company.
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16. 16
FUNDING ROUNDS //TIMELINE
THE SECRETS
16
The average duration between a Seed round and a Series A is 18 months
compared with 20 months between an A round and a B round. The average time
lapse reaches a maximum at the B and C stages and decreases afterwards.
21. MORE ABOUT HANY SEWILAM…
Hany Sewilam is the CEO of ITEX. He has extensive strategy, operations and
marketing experience across the technology, media, SMEs, products and services
sectors.
He was most recently the Managing Partner and Business Development Head of
AJA Ventures, working closely with leading global and regional companies, as well
as, the startup and VC ecosystem. He has advised Fortune 500 companies as a
senior consultant with AJA Ventures and led teams at Creative Sense, Pulse
Group, Jobardo, SuperLady, Eduneer and Orkanza while working in the U.S.,
Middle East, and Africa.
Hany holds an MBA and two bachelor's degrees in business administration and
finance. He is a board member of ENTR in Silicone Valley and The SuperLady
Enterprise Forum.
Hany is a regular speaker at major regional events on Sales, Marketing,
eCommerce, Technology, Business, Entrepreneurship and startup's issues.