Funding Preparation

Some ideas to think about

How much funding do you need? Over the years, I have heard of many ways to determine this. Such as: Well, Uncle Bob said he knew a guy when they were in the Army together, and he said he started a similar business for X amount. The question, “Is he still in business?” Answer, “No.”

Then there’s the justification move. George tells me, “DR, we’ve worked on this for weeks. I’m pretty positive we’ve included everything but the kitchen sink. Would you take a look?” It takes no more than a few minutes, and there’s no line item for taxes (of any kind). In another few minutes, I review the cost of goods sold to uncover that no numbers represent shipping the raw products to the point of manufacturing.

As a final review, I’m looking for the cost of the rejected product as a percentage and as a loss number. Nothing.

As I point these out, he begins being defensive and tries to justify his errors of omission. I know that it won’t take much to find other errors.

What does this mean?

As writers, we all know that editors play an essential part in the quality of our work. As a reader, when I find grammatical, punctuation, spelling, and general formatting issues, there is a problem. In all probability, several problems. The worst problem is that the intended message is lost to the reader.

Spreadsheets and Funding

The major spreadsheets (I make NO recommendations) are shown above. Some are good at this. Personally, I’m OK. What I don’t know would probably fill a few books. Here’s what I do know. I always have my work checked if I want to raise money from others. I won’t put others at additional risk because my team didn’t consider something.

I have auditors review for these specifics:

• Tax liabilities
• Rebates, refunds, advantages of quantity
• Product Quality
• Local, state, and country compliance.
• Formatting

There are some additional considerations if I intend to take the company public. For those, I seek the counsel of one of the big three. If there are several wealthy investors involved, there are some added regulatory issues that must be considered. Ensure that someone with a series five and or seven license advises you. If it’s an angel investor, they’ll tell you exactly what they want to see. If it’s a friend, ensure they have the best information.

I hope you see the complexity of preparation for funding. Always let the numbers determine the ask. They are the facts at hand.

It's been my intention to help you understand the level of detail required. And to help you think through the process and its intent.

Thanks for reading,

✍ — I would greatly appreciate it if you commented to let me know you saw this post. Thank you!

©DR Rawson

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