Creating an investment worthy story for your innovation
A blog by Susan Long, a Frontier Tech Hub coach
Here at the Frontier Tech Hub, we work with many brilliant innovators who are extremely talented at developing the technology and have a deep understanding of the problem they’re trying to solve, but raising funds can present a new challenge and it’s hard to know where to start.
In this blog we aim to demystify this process, with practical points for creating an inspiring narrative and preparing the documents to give investors the confidence to buy into your vision.
Preparing for investment, telling your story
It’s important to remember, when dealing with all the various document types and formats that you might be asked for, that at the core it is always about your story. Investors* will want to examine details of your plan, but fundamentally they need to believe in you. Having a strong narrative throughout is essential to show:
Who are you and why do you want to solve this problem?
How will you solve it?
Why is this the right time and place?
What will your impact be?
To help you do this, below we outline the most critical points to convey and suggest a few document types that can help, along with links to useful templates.
*For the purpose of this blog we will refer to anyone giving funds as an ‘investor’ including those who are donor backed and issue non-repayable grants.
What documents do investors want to see?
Idea Brief
A 1 or 2 page introduction which gives the essential information to explain the problem and how the innovation will solve it.
Business Plan
A comprehensive document covering an organisation's goals and means to achieve them, which is useful as both an internal guide and for use with potential investors or other partners.
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Executive Summary
Organisation Overview
Market Assessment
Team Bios & Organisational Structure
Product/Services
Operational Model
Key Partnerships
Customer segments
Channels to markets
Use cases
Impact Metrics & Targets
12/24 month timeline
Financial Projections
Risks and risk mitigation
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Impact Evidence Plan
A document which sets out the system that will be used to track the innovation, and measure and evidence the impact it has.
Financial Model
A complete set of financial data for the organisation at the current time and into the future.
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Dashboard
Income Statement
Profit & Loss
Benchmarks & Assumptions
Sensitivities
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Y Combinator Accelerator Library and Start-up School
SCORE's Financial Model Template
Pitch Deck
A brief presentation which aims to engage potential investors with an overview of the proposition for investment.
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Problem
Solution
Market Opportunity
Competitor Analysis
Business Model
Use Cases
Traction / Progress to Date
Team Slide
Next 12 months milestones
Call to Action / Funding Requests
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Y Combinator Accelerator Library and Start-up School
Sequoia Capital Guide to Pitching
Pitch Fire Pitch Deck Templates
Canva Pitch Deck Templates
Term sheet
A document which sets out the terms and conditions expected for a subsequent investment (may also be know as a 'letter of intent).
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Y Combinator Accelerator Library and Start-up School
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Updating the narrative as you mature
The emphasis of your narrative will also change over your funding journey, as the criteria of funds reflect the maturity of the innovation.
Early-Stage Funds: Many funds have intakes for early-stage ideas, often called ‘seed’ or ‘pre-seed’ funds. These funds prioritise the clarity of the idea and its potential social impact and pathway to scale.
Later-Stage Funds: If you’ve successfully passed through the early stages, you may qualify for a second level of funding aimed at scaling, often labelled ‘scaling,’ ‘transition to scale,’ or something similar. In some cases, these funds may only be accessible to those who’ve advanced through the earlier stages of that specific fund, though many are open to all. A solid proof of concept and evidence of impact becomes crucial for these funds.
Early-stage funds’ focus on understanding the team and the potential for impact and scale…
.. while the later-stage funds place emphasis on proof of concept and evidence of impact.
The above also shows how this set of donor backed funds look for innovations which match their objectives, such as UNICEF’s focus in ideas which will impact children or WFP ‘s access to food. This is a topic we’ll cover in more depth in our next blog on types of investor and the different funding mechanisms.
If you’d like to dig in further…
🚀 Look out for our next blog on types of investor and the different funding mechanisms (coming soon!)
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