Fundraising 101: Checklist for Entrepreneurs

by Scott Edward Walker on May 9th, 2012

I’ve been a corporate lawyer for 18+ years, and there are certain fundamental mistakes that I’ve seen entrepreneurs repeatedly make in connection with fundraising.  Accordingly, I thought it would be helpful to provide a simple checklist tailored to first-time entrepreneurs.  I’ve also included links to prior posts for a detailed discussion.

1.  Do your homework and determine which investors are the right fit for your startup (see post here).

2.  Hustle and build relationships in order to get warm introductions to those investors (see post here).

3.  Optimize for people, not valuation (see post here).

4.  Only raise money from friends and family as a last resort (see #1 in post here).

5.  Get references and speak with other entrepreneurs and founders who have done deals with your prospective investors (see post here).

6.  Limit your pitch deck to 10 slides or less, tell a story and demo your product (see post here).

7.  If it’s a seed round, issue convertible notes (see post here).

8.  Don’t solicit investors via Facebook, LinkedIn or Twitter (see posts here and here).

9.  Only raise funds from “accredited investors” (see post here) and make sure your lawyers file a Form D with the SEC and applicable state commissions (see post here).

10.  Don’t pay anyone a commission for raising funds for you unless they are a registered broker-dealer (see post here).

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3 Responses to “Fundraising 101: Checklist for Entrepreneurs”

  1. Jennifer says:

    What a great checklist! Thank you for sharing them, I really like #4! Mixing business with family is never a good idea!