What are some ways to really catch potential investors' interest during a pitch? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
I'm going to take a legal slant here since most of the other answers have focused on pitches or strategy.
For some reason, the legal side of small companies is so often forgotten about and, from my experience as a startup law specialist, strong legal foundations are top of an investor's checklist.
Here are a few documents an investor will want to see (bear in mind that most of these apply just to the UK, but they will be similar in the U.S.):
Terms Sheet - This is not actually a legally binding document, more of a preliminary to the main documents. It sets out the terms on which your investor is going to give you funding, be that by taking equity in your company, a convertible note, or another arrangement. It will also detail the obligations on your side and the requirements you will have to meet.
Shareholder's Agreement - This will detail the agreed terms of the term sheet in more detail. It will explain the rights and obligations of any shareholders and should explain what happens in the event of sale or departure.
Vesting Provisions - Will protect the investor or other shareholders from one of the founders leaving the company. They will make the shares 'vest' in the shareholders over time.
Subscription Agreement - This agreement is the promise of your business to sell a certain number of shares to the investor at a certain price, and the agreement of the investor to pay that price.
Articles of Association - These articles govern the operation of the company once it has received the investment.
SEIS/EIS - This isn't a document as such, but a government scheme to provide tax relief for investors investing in startups. They are designed to encourage investment in startups and are a useful tool for any small company. Speak to a lawyer to see if you qualify - if you do, you will instantly be more attractive to investors.
So, that was exciting. If you have any questions on these or if you want me to help you finding a lawyer, pleaseor visit my . Good luck with investment!
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