E-BOOK
Getting Funding Ready
Eight chapters on the twelve months before a round, in order, from both a lender’s angle and an investor’s. The pattern in every chapter is the same: the work is boring, cheap done early and ruinous done late, and the difference between the two is usually a year of lead time nobody thought they needed.
- Eight chapters, one timetable, both routes to money
- The dilution arithmetic worked in full, pool and all
- The metrics diligence will rebuild from your ledgers
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Who this e-book is for
Founders and MDs twelve months out from raising, weighing debt against equity, or holding a term sheet now and wanting to understand exactly what it costs before signing it.
You plan to raise but do not know where to start
Start with the timetable chapter: twelve months out the close discipline and the model, nine months out the legal spine and advance assurance, six months out the metrics computed from the books, three months out the data room, built before the term sheet. Each stage is a chapter, and each chapter ends at the tool or checklist on this hub that does the work.
You are choosing between debt and equity
The book opens with the two questions: a lender asks whether they get repaid if it goes badly, an investor asks how big it gets if it goes well, and every document serves one or the other. Then the arithmetic, run to the same date: £250,000 over three years costs £87,500 as debt and £600,000 as a 20 per cent stake at a £3,000,000 exit. Equity is the right money for risk a lender will not carry, and the wrong money for a gap a facility would cover.
You are holding a term sheet now
Chapter seven works the demo round in full: £1,000,000 on £4,000,000 pre-money is 20 per cent to the investor, and then the quiet clause, a 10 per cent option pool created before the money lands, dilutes only the existing holders. Founders keep 70 per cent rather than 80, and the counter is not refusing a pool but sizing it to the actual hiring plan between rounds.
FACTS
Two audiences, one overlap
The lender reads your downside: cash, covenants, the stability of the base, with leverage commonly capped near 3 times and interest cover floored near 4. The investor reads your upside: growth, retention, unit economics. The overlap is trust in the numbers, which is why the first six months of readiness are identical whichever route you take.
8 chapters
With the twelve-month timetable on one page
£500,000
What the demo round’s option pool costs the founders
FACTS
The metrics get rebuilt, so compute them first
Whatever the deck claims, diligence recomputes churn, concentration and unit economics from your ledgers. The book works the two that surprise services companies: a 10.4 per cent client whose exit takes 56 per cent of profit once operating leverage is applied, and a churn rate that caps growth at £670,000 a month regardless of sales effort. Finding your own numbers first means theirs match yours.