5 steps for your startup to receive an investment

5 passos para sua startup receber um investimento

The process of obtaining investment for a startup is similar to that of a marriage, as the investor will become a partner in the company and the company looks like a marriage. Therefore, one must follow the necessary steps so that both know each other and have a mutual understanding as it is fundamental to the success of the relationship.

1. Pitch
The first step is when the entrepreneur presents their business to various investors. At this stage, it is fundamental that the entrepreneur presents his company succinctly and objectively, through pitch, to attract attention.

2. Meetings
From the moment you have interested investors, you move to the second step to receive an investment. In this stage, meetings are held between the entrepreneur and those interested in investing in the business, in which are presented the details of the company, its strategy, in which the investment resources will be applied and the expected results.

3. Term of commitment
Keeping investor interest, it is time for the first commitment, in which the main terms and conditions of the business are negotiated, such as capital to be invested, investor participation and the main rules of relationship between the two. All these terms are written in a document called Term Sheet or MOU (Memorandum of Understandments), a compromise term in which, without any obstacles in the next steps, the investment will be made.

4. Due diligence
Once this first commitment is signed, the due diligence phase begins, in which an audit will be contracted to evaluate the business, in the legal, financial, accounting and tax aspects. In addition, additional advice may be needed for a more detailed assessment of the market or the product or service. At the same time, the law firms that will draft the final investment contracts are also hired.

5. Signature
If no potential contingency is detected during due diligence that prevents the execution of the business and if there is an agreement on the final drafting of the contracts, the investment is carried out as agreed. However, it is important to remember that this “marriage” has foreseen divorce, with the exit of the investor. Hopefully this will be a happy ending for both of you.

Fonte: Exame PME