Startup Funding Espresso -- Stages of the Deal Process
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A startup investment goes through a series of stages. It starts with the pitch presentation in which the startup introduces the deal to the investors. Then there\u2019s the first follow-up meeting in which the investors dig into the deal to learn the details. Investors want to think about it and also want to see the startup continue to make progress. Then comes the Due Diligence phase in which the investors perform a more rigid review of the startup\u2019s documents, team, and market. If the terms sheet has been established by other investors, then the investors review those documents. If not, the investor must negotiate the terms including valuation. Investors then check with their network to see who else may want to invest or put it out to other investors for syndication. Finally, there\u2019s the closing of the round with the signing of documents. Not every startup makes it all the way through the process. Here are some key challenges: When the investors come together to dig into the deal, it must have enough traction and value propositions to maintain the investors\u2019 interest before the investors commit significant time to it.\xa0 Some deals stall because the diligence process didn\u2019t continue because the investors were distracted. Some deals stall because the startup and the investors cannot agree on valuation. Finally, some deals stall out or come up with a lower investment amount because investors fell out at the closing stage.\xa0 It\u2019s important to keep the momentum going throughout the process both on the investor side and the startup side. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0 For Feedback please contact info@tencapital.group