get started
Know yourself
Where does your company stand today? Knowing yourself is crucial before even considering an investment!
Investor readiness
Where do you want to be in 5 years and how will you get there? Your funding strategy is intertwined with your growth strategy!
Proof
What are your plans and expectations about your next funding round? Check if they are compatible with your growth and funding strategies as well as current situation!
Export your Investor Readiness
Canvas as a PDF file
Save
Download plain canvas
Briefly explain why your startup has a strong growth
Investors generally prefer startups with growth potential, also international, and a scalable business model.
Briefly explain why your startup has a strong competitive edge
Investors generally prefer startups that have a superior value proposition that they can protect from competitors, and that can obtain an attractive position in their value chain.
Briefly explain why your startup has a great investment opportunity
Investors generally prefer startups that have credible yet attractive financial outlooks and exit potential.
Briefly explain why your startup has a great market opportunity
Investors generally prefer startups that have a clear target market that is large and growing.
Briefly explain why your startup has a strong value proposition
Investors generally prefer startups that solve painful problems for the customer, have a clear & compelling value proposition and can demonstrate a market demand.
Briefly explain why your startup has a solid execution
Investors generally prefer teams with ambition that have a solid go-to-market/ growth strategy, and that are able to identify & manage risks.
Briefly explain why your startup has a great team
Investors generally prefer teams with committed entrepreneurs that have relevant domain knowledge & track records, as well as complementary expertises.
Tell us more about your next round of funding:
- What investment amount are you looking for (in €)?
- Where do you need the investment for?
- What type of investor are you looking for?
E.g. angel investor, venture capital fund, best fit, other (crowdfunding, innovation loan, innovation subsidy, …) - When do you want or need an investment?
Please indicate month/ quarter and year. It’s okay if you’re not actively fundraising at this moment. We want to get you in touch with investors so once you will be fundraising you can hit the ground running. In that case, please estimate when you’ll be fundraising.
Tell us more about your startup:
- Company name
- Website URL
- In what city are you located?
- When was your company founded?
Exact day is not important, month and year are) - One-liner that summarizes what your startup does
- What are your market and technology ‘tags’?
E.g. software, SaaS, e-commerce, e-health, artificial intelligence, hardware.
Name as many relevant as possible, in order of importance/ relevance - Who does your business model primarily target?
E.g. B2B (business-to-business), B2C (business-to-consumer), P2P (peer-to-peer) - What is your revenue status?
Your run-rate is your revenue per year if you extrapolate this month’s revenue. So: revenue this (or last) month * 12. - If applicable, could you explain a bit about the quality of your revenue, e.g. if it is recurring or comes from different customers?
Investors love recurring revenue because it’s predictable. In this case, with recurring we mean that you have customers that have a subscription on your product and pay you each week/ month/ year/ etc. Also, revenue that comes from multiple customers is preferred for risk reduction reasons. - Company size
# employees, including founders - Does your startup already have other investors on board?
If yes, please explain who and what share of the company other investors own.
Convince us why your startup will be successful with metrics, social proof and investment commitment.
Answer these questions:
- What metrics do you track to measure your startup’s progress?
Please mention 1-5 key metrics + relevant quantification. E.g. webtraffic (unique visitors): 20k last month. - Do you have social proof?
E.g. selected for accelerator program, won big prize, recommendation of scientific expert, letter of intent from customer - Do you have investment commitment already?
E.g. commitment from a regional investment organisation or angel that don’t want to be lead investors. - What other ‘proof’ do you have that your startup will be successful?
Tell us more about your startup’s plans and ambitions. These answers will help us to see if you are really investor ready.
Know yourself descr.
Suggested topics & further reading:
The summary can be a short version of your pitch
There are plenty suggestions for a logical order in your pitch. You can use them to create a summary of your startup. We’d recommend these elements for a brief summary (adopted by henQ’s pitch deck guidelines):
- Company purpose – Define the company / business in one sentence
- Problem – Describe the pain of the customer (or the customer’s customer)
- Solution – Demonstrate your companies value proposition to make the customers life better
Additional elements for your pitch can be:
4. Why now? – Define recent trends that make your solution possible
5. Market size – Calculate top-down AND bottom-up addressable market sizes & growth potential
6. Competition – List competitors and competitive advantages
7. Product – Product description (functionality, features, architecture, IP) and roadmap
8. Business model – Revenue model(s), pricing and metrics
9. Team – Founders & management history/trackrecord/strengths
10. Finance – P&L, cashflow projection and investment deal proposition
Pitchdeck templates
Other great templates for pitchdecks include:
- Seed Fundraising — How to Build a Deck
- What Every Entrepreneur Should Know About Pitching
- Sequoia Capital Pitch Deck Template
- Startup Pitch Decks
Suggested topics & further reading:
Investor Readiness Canvas
You can use the input of the Investor Readiness Canvas (see elsewhere on this website) for this building block.
Investors’ criteria
Research suggests that these are topics that investors find important when assessing the quality and investor readiness of companies:
- Team – Investors generally prefer teams with committed entrepreneurs that have relevant domain knowledge & track records, as well as complementary expertises.
- Execution – Investors generally prefer teams with ambition that have a solid go-to-market/ growth strategy, and that are able to identify & manage risks.
- Growth – Investors generally prefer startups with growth potential, also international, and a scalable business model.
- Market opportunity – Investors generally prefer startups that have a clear target market that is large and growing.
- Value proposition – Investors generally prefer startups that solve painful problems for the customer, have a clear & compelling value proposition and can demonstrate a market demand.
- Competitive edge – Investors generally prefer startups that have a superior value proposition that they can protect from competitors, and that can obtain an attractive position in their value chain.
- Investment opportunity – Investors generally prefer startups that have credible yet attractive financial outlooks and exit potential.
Golden Egg check assessment
Curious about how you score on potential, feasibility and investor readiness? You can request an account at Golden Egg Check to do your own assessment and see which investors are most relevant to your company (€125 excl. VAT).
Suggested topics & further reading:
What is traction?
Traction, as defined by AngelList co-founder Naval Ravikant, is: “Quantitative evidence of market demand.”
Traction is proof that somebody wants your product. Ideally, it should communicate momentum in market adoption.
Broadly, we find traction most convincing in the following order:
– Profitability
– Revenues
– Active users
– Registered users
– Engagement
– Partnerships/clients
– Traffic
Of course, traction depends on the type of startup and the context of it. Find your way to measure and communicate traction.
Learn more about traction in these blogposts and tools:
- How to Show Market Traction
- How do you define ‘traction’ for a start-up?
- How Do You Get Early Traction For Your Startup?
- Traction Model by Ash Maurya
- What traction do I need to raise money?
Suggested topics & further reading:
Current investors
Who are current investors in your company, if any? You can mention them by (company) name and by type of deal (e.g. seed capital, (convertible) loan, angel investor). This can also give you some ‘social proof’ to new investors.
Cap table
A cap table shows who current shareholders are and what percentage of the company they own. This is relevant information to new investors, for example to see that founders still have a significant enough amount of shares to keep being motivated and to understand what other investors have a say in the direction of the company.
Reading:
- Capitalization Table
- How Startup Options (and Ownership) Works
- How to Read and Understand a Cap Table
- Cap Table and Exit Waterfall Template
Financial agreements
If your startup raised funding from investors before, including equity, debt or convertible debt, you’ve had to make financial agreements, e.g. on:
- Valuation
- Interest rate and repayment agreement
- Discount rate and valuation cap (for convertible)
You can summarize the key financial agreements that you made in the past, as this helps new investors to understand the ‘financial legacy’.
Suggested topics & further reading:
As a founder, your job is to keep everyone else happy by giving away your company. Give it away carefully, but give it away, because not doing so guarantees you will be the majority shareholder in a worthless enterprise.
As a founder, your function is to manage the distribution of your own holdings so that you end up with fewer shares but more wealth. The idea is to end up with a thinner slice of a thicker pie. Which requires strategic thinking and long-term planning. – Pascal Finette
Startup financing stages
Consider startup financing stages to identify your company’s current stage, your current investment requirement and your future plan.
Milestones
What are foreseen milestones (i.e. significant steps of risk-reduction and value creation) in your growth plan? Can you split up your total investment need into milestones for your growth?
Practical tools & relevant blog posts
- Understanding Early-Stage Venture Financing Stages by Claire Fauquier
- How You Finance Your Growth Determines Your Future by Pascal Finette
- Why Capital Efficiency is Key to Building a Successful Business by Oliver Verhage
- The Sequencing of Funding by Pascal Finette
- Bootstrap vs. VC – Spreadsheet template to compare bootstrapping with raising a seed round
Suggested topics & further reading:
What is your ambition?
Where do you want your company to be in 5 years from now? What will your focus be:
- Growth or profit?
- Profit or impact?
- Go big or go home?
- In control or ‘outta control’?
What is your go-to-market strategy?
How will you get to problem-solution fit and product-market fit? What is your (initial) target market?
Recommended articles and tools in this regard are:
- Lean Canvas
- The Hidden Roadmap by Rodrigo Martinez
- Leanstack Traction Model
What is your growth strategy?
How will you capture the market? Will you focus on growth or on profit? What’s your plan to scale-up, also internationally? What is your projected growth rate? What is your business model, e.g. are you cheaper or better than incumbents?
Have a look at these articles:
- Understanding the Mendoza Line for SaaS growth by Rory O’Driscoll
- The Rule of 40% For a Healthy SaaS Company by Brad Feld
- What Is Disruptive Innovation? by Clayton Christensen
Milestones
What are foreseen milestones (i.e. significant steps of risk-reduction and value creation) in your growth plan?
What is your exit strategy, if any?
How do you see the future of your company? Do you plan on an exit (i.e. sell your shares) or do you want to create a sustainable, profitable business.
- Profitable business: No foreseen exit but instead sustain a healthy, profitable business
- Acquisition: Selling your company to another company.
- Initial Public Offering (IPO): Offering your company’s stock to the public stock market.
Partly adopted from Exit Strategies for Your Business by Stever Robbins.
Other recommended articles in this regard are:
- How to Build a Startup That Gets Acquired by Steven Blank.
- Meaningful Exits for Founders by Bryce Roberts
Suggested topics & further reading:
Of course you cannot predict the future; but you should have a clear idea, based on your business plan, how much money you will need to finance your growth. Investors will want to know about your burn-rate and your breakeven point, so be prepared. Be realistic but ambitious: if you ask too little now, you might slack behind the competition. But then again, there is no such thing as free money.
FUNDING NEED
How much money do you need and for what exactly?
For instance: We need €50,000 for building a prototype, we need €200,000 for starting mass production of our product, or we need €1.000.000 to strengthen our sales team and scale internationally.
Choose the funding need in such a way that it will allow you to achieve a new value creation milestone. You should consider the balance between not raising too much, as the capital is probably more expensive when you’re still is a risky phase, and not raising too little, as you’ll be spending more time fundraising than running the company. In general, we advise startups to raise enough to cover 18 months of runway. Use sales projections to determine your exact funding need.
Practical tools for making a financial plan
- Runway and Cash Forecasting Tool
- SaaS Financial Plan 2.0 by Christoph Janz
- Finance Navigator by EY – helps to create a professional financial plan
Suggested topics & further reading:
Compatibility is actually a very important thing to consider. It’s about how all section in this Startup Funding Canvas are connected and if that makes sense. It’s important to realize that you can’t have it all. You can’t optimize for the long-term if you don’t consider the short-term. The interests of the founders are not always perfectly aligned with the interests of investor. How will you manage that? What are potential ‘areas of conflict’?
They could include:
- Traction with Funding need
- Investor readiness with Investor type
- Growth strategy with Funding strategy
- Funding strategy with Terms (valuation and ownership in later rounds: will founders have a big enough stake and will this leave enough upside for investors?)
- Terms with Investor legacy (blocking terms from previous rounds)
- Growth strategy (e.g. scale-up internationally) with Smart needs (e.g. experience in scaling up companies internationally)
Suggested topics & further reading:
Valuation
How much is your company worth? If you’re raising an equity investment, this is a relevant question. You need to know how much ownership you are willing to give to investors in return for their investment.
Be careful not to give away too much equity at an early stage of your business as this could limit your potential for raising future investments and could hinder your further growth. VCs generally love to see that the founders still have a significant stake in the company.
- Startup Valuation made simple by Serious Funding: The VC Method
- Equidam – Online business valuation
- The Secret Sauce to Startup Valuation
- What is a fair valuation for your startup? – “The #1 Guide To Startup Valuation”
Term sheet
Do you know this investor’s typical terms? Have you considered the concepts underlying a term sheet they could offer?
Have you researched how they carry out their due diligence and how long that process usually takes?
Take initiative in the process of drafting the term sheet; it could improve the deal you get!
Have you checked for killer terms? Are you taking on too much risk for your company?
- How does liquidation preference work? by Joachim Blazer
- How does anti-dilution work? by Joachim Blazer
Suggested topics & further reading:
investment type
Depending on the type of company you have, as well as the growth and funding strategy, some investment types are more relevant than other. Our advice? No venture capital is an option. No value creation for your customers is never an option.
Here’s a primer on types of startup funding.
a. Revenue (money in return for your product or service)
- Launching customer(s) (get funded from customers)
- Bootstrapping (an overview)
- Crowdfunding (complete guide)
b. Equity (money in return for ownership in your company)
- Angel investment
- Venture capital
- Equity crowdfunding
- Strategic partners
c. Debt (money in return for interest and pay-back)
- Basic debt
- Convertible debt
- Innovation loan (see Vroege Fase Financiering or Take-Off phase 2)
d. Grant (money when other sources are not available)
e. Other (e.g. ICO)
Investor types
Based on your investment needs and preferred investment type, which investor type(s) would suit you best?
- Friends, family & fools
- Angel Investors
- Venture Capitalists (VCs)
- Crowdfunding platforms
- Banks
- Strategic partners
- (Potential) customers
- Government bodies (see Take-off Grant for academic startups)
Consider the basic concepts of startup financing and the pros and cons of the various funding options that suit you, before making a shortlist of potential investors.
Remember, you don’t have to just choose one investment type: Combinations are also possible and you can be strategic about such combinations. For instance, choosing an angel investor who has links to a potential client for your business; the angel takes up equity in return for an investment, but he/she also brings in a launching customer, market awareness and revenue.
Suggested topics & further reading:
An investor can provide you with more than just cash. Often they have experience as an entrepreneur themselves, have some valuable contacts or have links to talent that can help you expand your business. Using insight from the questions you asked yourself in the previous blocks, you can determine which aspects of building your business you could use some help with. A public investor might be able to help you come in contact with governments: if your business is focused on the public sector or if your product isn’t lawfully approved yet. A corporate partner or a university could, for example, help you develop your product further by leveraging their high-tech facilities and knowledge.
Just the way you did with your terms, think about your ideal investor and their ideal deal offer: What do they typically offer and ask for in return? Do the terms of that sort fit with the ones you’d like to offer? Think about ways to improve the alignment between your terms and your investor’s terms. Do not hesitate to be critical: It is fine to say no and explore other options if the terms of the deal don’t feel right.
Smart needs
Consider your smart needs and ownership preference: Do you want something more than money from your investor?
What kind of role do you want this investor to play? For instance, maybe you want an investor who has access to the US market, or maybe you want an investor who can attract solid technical talent to your team. Do they want to advise, be actively involved or just want to be passive?
Does your potential investor have a focus on your business’s sector?
Based on your current weaknesses and future plans, what expertise or contribution (beyond money) do you need from your investor?
What are areas in building your business that you could use help with?
Does the investor offer sufficient added value (beyond capital) for building, supporting and/or scaling your business model?
Have you checked the investor’s track record concerning the extra value they offer? Have you checked how many successful exits they’ve been able to orchestrate? It can be a good idea to talk to some companies in your investor’s portfolio; they can give a good impression of your investor’s track record in creating value and incentives for the portfolio companies.
oud:
1. What kind of role does this investor want to play in your company? Do they want to advise, be actively involved or just want to be passive?
2. Does the investor offer sufficient added value (beyond capital) for building, supporting and/or scaling your business model?
3. Have you checked the investor’s track record concerning the extra value they offer? Have you checked how many successful exits they’ve been able to orchestrate?
a. It can be a good idea to talk to some companies in your investor’s portfolio; they can give a good impression of your investor’s track record in creating value and incentives for the portfolio companies.
