As part of the process of entrepreneurship, you have to understand how to make the investment process efficient by creating a standard process that can be used for all investment opportunities. While the process may vary slightly, your goal here is to control the process versus the process controlling you. This enables you to focus not on reinventing the wheel each time, but on honing your message so potential investors see the value of your business.

The way you manage your investment process is also an indication of how you manage your business. A structured and organized process, with set tools, meetings and agendas, and clear messages, shows the type of discipline that investors value. When an investment process seems ad hoc, with days going by between asks and a scramble to put materials together, investors notice the lack of structure and discipline of the business. Don’t forget investors are always watching.

“The way you manage your investment process is also an indication of how you manage your business.” 

Data Room

Create a “data room” using an online document management tool (e.g., Box, Dropbox) that are often free or low cost. The data room includes the major documents of the company and additional items needed for investment. It is also organized around the functional areas of your company. For example, in the area of “Customers” it might include customer contracts, pricing documents and profiles. A data room allows you to create one universe of documents that can be accessed by anyone with credentials. When you create new documents or tools, you add them to the data room. This data room may be created for the investment process but then can be leveraged by the company for all of its daily activities.

Establish the Process

Regardless of the type of investor or the stage you are at, the following process should serve you well. You may not need all of the steps, or you may want to add additional pieces over time, but this basic framework will help not only streamline the process but help you improve at how you and your team function in the process. Think of it this way – if you drive to work the same way each day, you get to know where all the potholes and traffic jams are.

In the lecture entitled “Basic Investment Materials You Need”, we outline a series of documents you will create in the beginning of your process. The goal is to create these documents once and integrate them into this standard process. We suggest the following process after initial contact is made.

• Distribute and sign Mutual NDA. This provides both parties with the legal protection to protect each other’s confidential information.There is lots of debate about when to send an NDA. Use your judgment.

• Distribute Executive Summary, Deal Structure Document and General Presentation. Send out these documents which give the potential investor the basic information about your business. Remember, at this stage the investor is simply trying to determine if he or she is interested.

• Investor reviews materials and asks for follow up (e.g., request for more information or follow-up call or meeting). After reviewing the information, the investor will either pass or request more information or a follow-up call or meeting.

• Distribute the FAQ, Detail Presentation and Financial Model. When more information is requested, send along these more detailed documents which give the investor a deeper dive into your business.

• Call or Meeting. If a call or meeting is requested, distribute your standard Agenda and use that agenda to guide your meeting.

• Additional Documents from Data Room. At this point when the investor has expressed interest, they may want to get deeper into your documents. Direct them to your data room.

This will not cover the entire investment process, but it will streamline most of it and it will also help you train you and/or your team on how to optimize your opportunity. With a standard process, you can train your team on the documents, the process and the key messages you want to deliver. Hold training sessions with team members and rehearse their specific parts. With the Key Messages document as your guide, develop and train on messages that you want to reinforce in each area of the business.

You can deal with these topics as they arise or develop short documents or presentations that address these areas with more details in the same process (i.e., standard agenda that ties to the presentation/materials).

Training

With a standard process, you can train your team on the documents, the process and the key messages you want to deliver. Hold training sessions with team members and rehearse their specific parts. With the Key Messages document as your guide, develop and train on messages that you want to reinforce in each area of the business.

If you follow this standard process, it will help you streamlines your efforts and train you and your team around a standard process and set of tools.