Knowledge Base

While your initial financial summary focuses on the current financing and funds sought, the current financing requirements need to be derived from your full future financing needs. Your detailed financial model should therefore project out to at least a breakeven point and show all past and future financings (equity and debt) that you anticipate needing to get there. Investors will also push you for detailed projections through a planned exit point for the firm (e.g., M&A or IPO). You might as well include this in your workbook.


By developing a good sense of the “big picture,” you will be much more confident in interacting with investors on this slide. An important component to your projections is to understand the impact of planned financings on the ownership interests of the founder, investors, and other stakeholders. A detailed capitalization table, or “cap table,” showing all investors and the value of their investments over time should be a part of the detailed workbook. It is unlikely, however, that you will get to this level of detail in an initial presentation. I stress the need to know this early because it will minimize surprises later, such as how you might be surprised by the level of ownership dilution that will occur when outside funds come into the company.


Due to many issues that investment funds had with investors during the financial meltdowns of the dot-com era and 2008 crash, fund managers are also wary of others that have invested. They want to avoid co-investing with relatively weak investors and/or people that may be antagonistic to their objectives. Prior to making an investment, fund managers thoroughly review your cap table and satisfy themselves that they can accept your prior investors—or they will pass on the deal. It is best to be prepared and present this information early, especially if you have any concerns that some of your current investors may not pass muster.