Improve Investability with an Organised Investor Vault

Following a visit to SaaStr Europa, I came away with a surprising amount of nostalgia (as a former startup co-founder) and a bunch of reflections. When it comes to implementing learnings from conferences such as these into your business, it can be pretty overwhelming so I thought I’d share some insights on a crucial part of startup growth: gaining investment.

Strong fundamentals are crucial to gaining investment in 2024.

Money is more risk averse today and alongside a demand for better metrics, investors are looking for diligent and organised founders that will deliver efficient growth for their investment.

It’s obvious, and still true, that founders need to deliver their elevator pitch on demand. At SaaStr I was asked at least 40 times what CodeBase does and people will quite literally stop listening  if you take longer than 45 seconds to explain. 

Less obvious and equally important is that founders at every stage must have all of their core documents ready to share with prospective investors quickly after meeting them. Creating a well maintained investor vault isn’t as much fun as writing the elevator pitch. But for all of the interest a pitch grabs, the content of the vault (and sending it in a timely fashion) ultimately increases the likelihood of securing an investment.

An investor vault is a collection of important documents and materials that a founding team prepares to share with prospective investors.

Having a prepared investor vault will help facilitate an investor’s due diligence and reassure them that a founder has operational control of their business and the discipline to effectively manage their investment.

Additionally, when founders pitch they often speak to one or two people from a firm. Those few relay the message to the many colleagues involved in the decision making process. A well constructed vault is a valuable tool to help founders control the narrative as their message is passed up the line.

Founders should tailor their vault to their own stage and situation but in my long list I would consider including:

Pitch deck

• Executive Summary: The pitch on a page; a summary overview of the business, problem statement, solution, market opportunity, business model, traction, and high level financials.
• Pitch Deck: Polished presentation covering the key aspects of the business.

Financial Documents

• Financial Model: Detailed projections for the next three to five years, including assumptions.
• Historical Summary Accounts: Summary accounts for previous trading years.
• Cap Table: Detailed overview of the current capitalisation table.
• Funding History: Details of previous funding rounds, grant awards, loans, or other types of funding taken, if any.
• SEIS / EIS Advanced Assurance Statement: Advanced assurance of eligibility (this can be requested)
• De Minimis Register: A record of eligible transaction

Product Information

• Product Demo: Video demo of the product or prototype. At the very least some screenshots.
• User Testimonials: Feedback from early adopters or key customers.
• Technical Documentation: Whitepapers, patents, or technical specifications.
  

Employees and Third Parties

• Team Bios: Detailed biographies of the founding team and and key senior team members.
• Team Structure: Current and planned team structure.
• Advisors and Board Members: Information about any advisors or board members.
  

Legal Documents

• Incorporation Documents: Certificate of incorporation, Articles of Association, and Memorandum of Association.
• Intellectual Property: Patents, trademarks, copyrights, and related documentation.
• Contracts and Agreements: Key contracts, partnership agreements, and terms of service.
• Founder Documents: Founder agreements, disclosure statements, and dispute resolution statement

Sales Information

• Growth Metrics: Performance data including Customer Acquisition Cost (CAC), Lifetime Value (LTV), Net Retention Rate (NRR), YoY/MoM Growth.
• Customer and Pipeline Overview: Information about total number of users/customers (can be anonymised), and the sales pipeline including conversion rate and time to conversion.
  

Risk Overview

• Risk Factors: Identification of at least the top 3-5 risks and mitigation strategies.
  

Top 3 tips for founders:

1. Make your vault secure and easily accessible: Use a secure document sharing platform (e.g., OneDrive, Google Drive) with controlled access that you can share as you leave a meeting.
2. Keep it well organised: Clearly label and categorise documents for easy navigation.
3. Update it regularly: Keep the vault updated with the latest information and document versions.

Thanks for reading. Comments, questions and conversation are always welcomed. I’ll share more soon.