Chapter 3: The Fundraising process: overview

The fundraising process

Generally, the fundraising process consists of 4 key phases (Figure 1).

The entire process can last anywhere from 6 months to over a year depending on a variety of factors. Let's look at each of these phases.

Preparation — This phase involves the preparation of required documentation such as a pitch deck and investor information deck. In addition, it’s when you should fine-tune your financial model, research potential investors and start preparing your data room for a smooth due diligence process later on. 

Reach out — During this phase, connecting with potential investors is key. The focus is on reconnecting with existing contacts and getting on the radar of new potential connections (preferably through personal introductions and reconnecting), getting meetings to present your pitch and sending over your investor information deck. The goal is to spark appetite and secure second and third meetings with investors you have a good fit with.

Negotiate — During this phase, more advanced negotiations with interested investors take place. Usually, by this phase, the investors that are still in the process have a sincere interest in investing in your company, and deal-structuring specifics such as valuation, governance and preferences are negotiated and summarised in a ‘term sheet’. Once the involved parties agree on a term sheet, a due diligence process is initiated. In this step, investors verify the information you’ve provided on historical financials, existing shareholder agreements and other obligations, technology etc.

Close the deal — If no ‘hidden skeletons’ are found during the due diligence phase, the next step is to close the deal! The term sheet is translated into a shareholder agreement, and any legally required administration (such as review by a notary in Belgium) should be fulfilled. Finally, the money is transferred to your account and your company is all set for growth.