STEP BY STEP GUIDE FOR STARTUPS
BEFORE YOU APPLY, MAKE SURE YOUR COMPANY AND THE FUNDING ROUND MATCHES THE FOLLOWING CRITERIA
Looking for seed or pre-series A funding
Developed a product or service (MVP) that solves customer’s problem
Started (or starting soon) to generate revenue and have some proven market traction
Previously solicited FFF (Family, Friends & Founders)
Already surrounded by a good team
Valuation: €1.000,000 - €10,000,000
Capital Seeking: €200,000 - €2,000,000
Preferably located in Europe, but not restricted to
Startups from any sector
NOTE ON VALUATION
WHEN YOU LOOK AT VALUATION, PAY ATTENTION TO THE FOLLOWING ELEMENTS
Not just about valuating future cash-flow or exit
Valuation is always a mix of different methods:
- What you have (asset-based): Replacement Value
- What you have done (current situation)
- Rule of Thumb, Comparable Startups, …
What you possibly realize (potential): DCF Model, Exit Multiples
Pay attention on which Discount Factor you use (WACC <> RRR)
Other factors: go for smaller and more “don’t jump steps”, Run Way
4 STEPS TO FUNDING
SUBMIT YOUR COMPANY PROFILE FOR FREE AND BE VISIBLE TO LBAN INVESTORS
Complete your deck, by including:
- Product Stage + Road Map (Where are you now and what is next?),
- Current Traction & KPIs, CAC, Churn, …
- Funding Page.
Executive Summary (about customer problem, products & services, target market, business model, customer segments, sales & marketing strategy, competitors, competitive advantage, team)
Financial planning (current & projected figures)
Tips: Be as complete and comprehensible as possible to attract the attention of our investors and raise your chances of being funded.
The LBAN Investment Committee will analyze the startup based on:
Problem / Solution / Value Proposition
Product / Service
If selected by the Investment Committee, your startup will be invited to pitch to our members
Generally, LBAN can not offer individual meeting before the pitching event.
LBAN Pitching Events take place once a month.
Selected startups have 10 minutes to pitch their venture, in addition to 5 minutes reserved for Q&A.
Tips: Practice your pitch to stay within the time, address key points, care about storytelling.
4. FUNDING STAGES
If your startup receives interest from the LBAN community, LBAN management and/or Investment Committee could act as a facilitator in the deal flow for investor discussions.
Following that, individual angels will continue the process with due diligence, negotiation and investment.
Please note that not every pitching leads to funding.
Tips: Keep your profile up to date on GUST for as long as you are looking for funding. Our angels check regularly the platform and might get in touch with you later.
STAGE 1: PRE-DUE DILIGENCE
Takes place within two weeks after pitching event.
The Investment Committee (IC) organizes a first call with founder(s) of a selection of startups to gain a deeper understanding about the product, its innovation, scalability and the team. Usually, 2 to 3 IC members participate in the call. Following that, the IC is looking for investor interest among LBAN members. In case of interest, a startup proceeds to Stage 2.
STAGE 2: DUE DILIGENCE
Lasts from 3 weeks to 3 months (depending on the complexity of the business and on the timing of the funding round). If there was a prior interest from investors, some startups might start from Stage 2 directly. Interested LBAN members can join the due diligence at any time. Stage 2 usually starts with a larger call among all interested investors and founders. LBAN investors would request access to a startup data room.
STAGE 3: COMMITMENT FOR FUNDING
If the DD ended well, LBAN members will send a term sheet to your startup, which forms the basis for final negotiations for funding. If all parties agree, the legal work begins in Stage 4.
STAGE 4: LEGAL WORK
Legal work in progress. If the LBAN is a lead investor, we might work on our own models, such as term sheets, SHAs, draft ESOPs, employment agreements. This shortens the process and saves a lot of time and money for a startup. Our legal documents are used in many of our investments and therefore are field-proven with high chances of being accepted by VCs in subsequent funding rounds.
STAGE 5: FUNDING CLOSED
The funding round was successfully completed and startups remain in contact with LBAN investors. Our investors' contribution to the company goes beyond simply providing funding. Our members have significant expertise in many business aspects and between 20 and 25 years of business experience. There are between 4 to 8 LBAN members on successful deals. Our group ticket size varies between EUR 150k and 750k depending on the sustainability and scalability of the business model, the scale of the problem, the innovation of the solution, the product's market validation and the industry in which a startup is operating.