TLDR:
– Start-up entrepreneurs need to understand and follow disclosure fundamentals when raising capital.
– Key steps include creating a comprehensive business plan, defining the target investor, selling the company’s consumer value proposition, understanding capital needs, hiring finance staff, and determining investor interest.
Rebecca G. DiStefano, a member of Greenberg Traurig’s global corporate practice, emphasizes the importance of disclosure fundamentals for start-up entrepreneurs in raising capital. While some entrepreneurs find it easy to secure funding, others face challenges due to overlooking key principles. DiStefano provides key steps for first-time founders to successfully navigate the process of raising capital:
First, it is essential to create a comprehensive business plan that outlines the investment case for the product and validates data used in the pitch deck. Additionally, founders should define the target investor and focus on distinguishing the company’s unique value proposition to attract interest.
Entrepreneurs must avoid underestimating the startup’s capital needs, as this could lead to difficulties in securing funding and achieving growth milestones. Hiring a CFO or finance staff is also crucial to develop sound financial projections and valuation models.
Furthermore, determining investor interest through safe-harbor protected statements can help companies gauge market interest before finalizing their offering circular. By following these disclosure fundamentals, start-up entrepreneurs can enhance their chances of accessing investment capital and turning their vision into a successful operating enterprise.
