Startup's Due Diligence Information Venture Lenders Ask For

Tue, 14 November 2017 - Scott Orn

Video: What’s the Due Diligence Information Venture Lenders Will Ask for?

The first thing they’re going to ask for is your historical financials. They want to make sure you spent your money wisely.

Secondly, they’re going to ask for future projections. That way, they can see your cash out dates, they can see revenue inflection points, and they’ll know how long their cash will take you.

Third, they’re going to want a cap table. That way, they can see the ownership breakdown, which VCs own which, and they can also price out their options. They’re also going to want a 409A valuation to make sure they know the exact valuation of both the preferred and the common.

Finally, they’re going to want an investor presentation. That tells them the story of the company. It also shows whether you, the CEO, are good at pitching investors. They’ll evaluate all five of these data points, do their underwriting, and hopefully come back with a term sheet.

 

Latest posts

Recent Startup Podcasts

21 May 2019 - Healy Jones, VP of Marketing

Spring Cleaning Cash Flow Management Tips for Startups

14 May 2019 - Healy Jones, VP of Marketing

What Startup CEOs and CFOs Need to Know About Insurance

6 May 2019 - Charlie Hughes, VP Growth & Partnerships at Embroker

571-L SF Property Tax Statements for California Startups

30 Apr 2019 - Vanessa Kruze, CEO and CPA

Uber Lyft - April 2019 Updated Analysis

29 Apr 2019 - Healy Jones, VP of Marketing