The Most Important Thing You Need to Know About Fundraising Materials

Morning everyone, this is Ryan Bryden from Breakout Capital Group.

Our post today is going to be around fundraising “materials”.

From the 50+ founders I speak with every week, everyone loves asking about decks, data rooms, teasers, etc.

To be completely honest with you, most founders put more time and effort into this than they should.

Across the billions of dollars of capital our team has placed, we have never seen an investor deploy JUST because of the materials.

BUT we have them seen NOT deploy, just because of the materials.

Let me explain.

Take a look at some of the most “famous” decks from tech giants like Facebook, Uber, and Air BNB.

They are some of the simplest, plain, boring decks you’ve ever seen. But they are extremely clear.

The Asymmetry

Nobody's ever gotten excited reading a cap table. The deck does that. The traction does that. The founder does that, on the call, in the room.

A data room's job is smaller than that, and less forgiving. It just has to hold up once someone starts pulling on it. Get that wrong, and it signals something bigger than paperwork - a founder who can't keep the story straight when nobody's checking.

What Goes In It

At it’s most basic form, here is a list of what our team checks every time to make sure is present:

• Cap table - current and fully diluted

• Formation docs, board consents, equity grant summary

• Financials - historical P&L, balance sheet, cash flow, and a model with assumptions an investor can follow

• IP assignment agreements for every founder and early contributor

• Material contracts - customer, vendor, partnership

• Liabilities or litigation, disclosed, not discovered

• Org chart and key employee/advisor agreements

• Metrics dashboard and customer references, ready to go

The problem's rarely a missing document. Most founders have all of it somewhere, just scattered - three folders deep, an old draft sitting next to the new one, a number on slide eight that doesn't match the spreadsheet.

You must avoid this at all costs. Disorganization is a deal killer.

Once you have this pressure tested, and have people going into the room and being able to find what they need, there are higher leverage areas of your raise you can be spending you time.

If you have an active raise live right now > $2M, and have a question about your materials, or data room, drop me a reply and I’d be happy to answer.

Thanks for reading - let’s have an awesome week.

Ryan Bryden
Breakout Capital Group

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