Tip #79: Deal structure in one bullet

Tip 79: Deal structure – one bullet. In the pitch we need to know three things relating to “the deal”: (1) how much you are raising ($500,000); (2) what is the pre-money valuation ($2M pre-$ valuation); and (3) what is the structure (preferred equity with a 1x participating liquidation preference).

Tip #79: that’s it.

We do not need to read or hear about minor structural details (we’re a NC LLC), unless there’s some complication that needs addressing early on.

We don’t need to have information that is generally known (we’re selling equity, which means shares in our company) or relates to general angel investments (a preferred equity round means you investors get paid first in a liquidation event) – because we know this already.

You also don’t need to detail specific structural terms (the deal includes pro rata rights, redemption rights, …). You can simply mention that you have a standard deal (standard set of angel deal terms) – or if there is something very strange that needs addressing mention it now. (Bonus tip: make sure there is nothing very strange that needs addressing.)

So three long tips to summarize in one “deal” slide that only needs one bullet:

  • Raising $500k, preferred equity, $2M pre-$