How should Startups prepare for a Fundraise

Kartikeyan Khator
5 days ago
3 min read

Fundraising isn’t something you wing over coffee with a deck and a dream. The best raises are planned well before the first investor meeting is even on the calendar. It’s about being sharp on your numbers, clear on your strategy, and ready to show why now is the time to bet on you. And as you put yourself through the process, you gain deeper insights into your business, align your management team, and even identify potential vulnerabilities. Here’s a comprehensive list of to-dos that you must check off before approaching investors for your fundraise:

A Pitch Deck that tells your story – Remember, less is more. Keep things simple and jargon free. The flow of your deck should follow your narrative, everything else should be given in appendix. Investors should get the big picture in the first 2 minutes. Here’s a great guide to make compelling pitch decks by Vinod Khosla.
A Financial Model that spells out your business plan – Translate your story into numbers. Keep it clean, logical, and easy to navigate. Tie outcomes to levers that you can control. Be mindful of your growth rates and margins, don’t make it hard to believe. Projections are often seen as a promise, be realistic and if possible, a little conservative. Here’s a great guide to make quality financial models by Startup Indian.
A Valuation that justifies your dilution – Triangulate to convince. Adopt 3-4 valuation methodologies parallelly, to make your story more convincing. Carry out sensitivity analysis to arrive at a range of valuation, instead of only one truth. Your valuation exercise should be able to guide you through investor negotiations. Here’s a great guide to do startup valuations by Startup Indian.
The terms of investment – Pick the instrument that fits the stage. Decide in advance whether you’re going for a priced round or a convertible round. If convertible, decide on the broad terms of conversion which is in line with industry norms. Stay flexible to some extent, as different investors have different preferences. Here’s a great guide to decide which instrument suits you best, by Startup Indian.

A structured Data Room for investor Due Diligence (DD) – Organize today, close faster tomorrow. Anticipate all the documents and info that the investors will look into and keep them ready in the form of a well-structured and labeled data room. Get an internal DD done (often called vendor DD) if you’re unsure of your own state of affairs. This will help you to proactively resolve issues before an external DD happens. Include your cap table, financial model, latest MIS, customer pipeline, product roadmap and legal docs, among other things.

Startup Indian can support founders and ventures in the following ways:

Fundraise Preparation - Pitch Deck, Financial Model, When-How Much-Whom to Raise From, Deal Documentation and more. Know more here.
Business Valuation - Adopt multiple methods attuned to startup stage, to negotiate better with investors. Know more here.
Fundraising (as Investment Bankers) - Leverage our network to reach out to investors, lead conversations on your behalf, deal negotiation and closure. Know more here.
Shared CFO - Finance function handholding, top notch governance, internal controls, ongoing financial planning and more. Know more here.

This article featured in our Founder's Playbook which answers questions around startup fundraising - when, how much, at what price, and more. You can access the Playbook here.