Startup EcoSystem™ DealIQ™ Deal Condition Report
At every stage of your business where you are seeking investor funding, you will need to be able to present the content and the condition of your business, its products or services, the management team experience, and your forecast or existing revenue.
The Startup EcoSystem™ DealIQ™ Deal Condition Report survey and analysis report, or “DealIQ™” guides you through a series of questions from which metrics are generated to best position the offering made by your business for consideration by investors. Please note the following concerning the DealIQ™ DealIQ™ survey form and its ease of completion.
- Each of the DealIQ™ DealIQ™ fields contains instructional information on how to answer each question.
- The majority of form fields provided selection values and do not require long text answers!
- This page provides you with additional supporting help for sections and several of the questions contained on the DealIQ™ DealIQ™ survey form.
- Look for the link labeled “Learn More” in the field description when clicked will bring you to this page where you will find more detailed information about that field.
Section 1 – Primary Business Information
In the opening section of the DealIQ™ DealIQ™ survey form, we will collect information about your company that establishes its existence, including corporate history & status and its physical and virtual presence.
| Company Information | please review the help text under each form field in this section for the information requirements for each form field. |
| This is the email address that many companies present on their Contact Us or similar pages. New contacts would use the email address to make initial contact with your business. | |
| Logo | Why do we ask for your Logo? – If you provide your logo in any of the formats allowed, we will use this to personalize the DealIQ™ DealIQ™ for your company and its funding application. The logo image file must be in one of the following formats: pdf, png, jpg, or gif. |
| Parent Company Name | You have indicated that your business is a subsidiary or division of another company. Please provide the legal name of the parent company. This field is required if it appears on the DealIQ™ DealIQ™ survey. |
| Predecessors? | You have indicated that your business had at least one predecessor business. Please provide the legal name of the predecessor company. This field is required if it appears on the DealIQ™ DealIQ™ survey. |
| Alternate Name? | Some businesses go to market under a tradename that differs from the legal name of the business. If your business goes to market using a Tradename, please indicate the primary tradename that will be used. NOTE: you will have the opportunity to indicate whether you would prefer to have Startup Ecosystem refer to your business by its Legal Name or its Tradename. |
Section 2 – Classification & Lifecycle
Questions in this section classify the company in terms of its marketplace & market positioning, and its lifecycle in terms of capitalization and commercialization.
| Company Stage |
What is Company Stage and how does it impact my application? We all recognize that every company evolves through a series of growth stages from an original product or service idea through increasing scale and for some companies to a stage where growth indicates that an exit either via acquisition or a public offering occurs. By indicating your business growth stage, investors gain an idea of both the product or service, even if it is at the “Idea” stage, its potential, its likely stage-by-stage funding requirements, and how they may be able to contribute to your offering via mentorship in addition to funding dollars. |
| Exit Stage |
Why do we ask about your “Exit Stage”? Startup EcoSystem™ investors have experienced exit stage shopping and execution as either or both founders, acquirers, or facilitators. By providing information about your exit stage, you have the opportunity to benefit from the hands-on and practiced experience of our members. |
| Crowdfunding |
Why does the DealIQ™ DealIQ™ Survey ask about Crowdfunding? Crowdfunding definitely has a place and role that it can play in the business life cycle of a startup and early-stage business. Startup EcoSystem™ asks about your Crowdfunding experience to gain a better understanding of how this funding effort contributes to your business equity (or is simply a form of pre-paid sales), how the crowdfunding effort appears in your business Cap Table, and what obligations your method of crowdfunding may have placed on your business. |
| Non-Dilutive Funding |
Why do we ask about Non-Dilutive Funding? Non-dilutive funding typically takes a form such as government or NGO grants, incubator or accelerator prize awards, or similar funding for which no equity has been granted. The collection of non-dilutive funding is often a good indicator to investors that your business has been reviewed by individuals, groups, or government agencies that have made a well-qualified and favorable review and assessment of your business, its products, or its ideas. This is considered by some investors as quite favorable in terms of how they consider your funding offering for their investment. |
| Current Round Notice | In this section, the DealIQ™ DealIQ™ Survey collects information about your current offer for funding. A later survey section will ask you to provide specific details about your current funding offer such as amount, type of equity or note, and if a note, the term, interest rate to be paid, and any conversion preference or discount that may be granted to the investor. |
| Current Round Certification |
What is a Funding Round Certification as defined by the United States S.E.C.?
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| Past Rounds |
Why does the DealIQ™ DealIQ™ Survey ask about “Past Rounds”? Providing detail about any past funding rounds provides a clear presentation of how your business Cap Table evolved. This demonstrates the likely improvement in business value over successive funding rounds and provides potential investors with a better understanding of the business valuation that you are indicating for your current funding round. |
| Future Rounds |
Why does the DealIQ™ DealIQ™ Survey ask about “Future Rounds?” Indicating that you have a plan for the next or future round of funding allows potential investors to understand a number of important factors which may impact the size of their potential funding participation. These include an indication that you have analyzed your business development requirements including Go To Market needs and have aligned funding requirements to your forecast to best ensure success; that you have matched your fund receipts to appropriate uses of funds; that your business vs your forecast is well and efficiently defined to best ensure success. |
| Classifications Questions | This is your opportunity to help Startup EcoSystem™ help you! Please consider these two questions in relation to your participation in this section of the DealIQ™ DealIQ™ Survey. |
| Classification Answers | This is your opportunity to help Startup EcoSystem™ help you! Please consider these two questions in relation to your participation in this section of the DealIQ™ DealIQ™ Survey. |
Section 3 – Presentation
Now we will collect one or more files that introduce the company’s subjective or persuasive case for being investable.
| Pitch Deck Available? | Your pitch deck is your first opportunity to connect with and introduce your business product or service to potential investors. The first thing that the majority of investors want to see about your business and its funding offer is your pitch deck. |
| Summary | While it is tempting to produce a lengthy pitch deck that attempts to say everything possible about your business, its products and/or services, long pitch decks are almost never read. To grab the attention of prospective investors, keep your pitch deck to 3 pages or less in which you feature the problem that you are solving and what makes your solution have high value in its target market. |
| Demo Available? | Depending on the type of product or service, the ability to show prospective investors your solution in practice via a demonstration video or sequence of images showing your product in use can be a very valuable (and convincing) part of your presentation. |
| Process Model | Many businesses make use of process models to provide a map of how their solution provides a new or superior solution to the problem for which their business and product or service is the superior solution. Process models also very often make it easier to inform your investment audience to more fully appreciate the use and value of your solution. |
| Business Model | Many businesses make use of financial or economic business models to provide a map of how their solution makes efficient use of invested funds and effort to build and deliver their solution to yield a valuable return on these efforts. Economic business models also very often make it easier to show prospective investors the primary drivers to achieve the intended ROI. A valuable reference concerning what goes into a well-designed business model can be viewed here. |
| Illustration Questions | This is your opportunity to help Startup EcoSystem™ help you! Please consider these two questions in relation to your participation in this section of the DealIQ™ DealIQ™ Survey. |
| Illustration Answers | This is your opportunity to help Startup EcoSystem™ help you! Please consider these two questions in relation to your participation in this section of the DealIQ™ DealIQ™ Survey. |
Section 4 – Market
Without enough customers eager for a solution, willing to pay enough to have it, and that makes the seller significantly profitable, there is no reward for founders and investors taking the risk. Questions in this section quantify the company’s market opportunity (size), solution-market fit (demand), and go-to-market strategy (reach).
| ASP? |
What is ASP? The average selling price (ASP) of goods or commodities is the average price at which a particular product or commodity is sold across channels or markets when measured in terms of either unit as sold price or typical contract size. The term is especially used in the retail sector and technology distribution. Using an “average” value allows this metric to be applied to any business. Often initial ASP may be low to attract early purchases to validate the effective nature of the product or service. As acceptance is generated, this may represent the opportunity to increase the ASP to achieve a better margin (profitability). As product or service volume builds causing unit costs to reduce, ASP may be adjusted down to increase market share and maximize top-line revenue. |
| ASP Early |
What is ASP Early? Often initial ASP may be low to attract early purchases to validate the effective nature of the product or service. Your answer to this question should be the initial or introductory price at which you plan or are bringing your product or service to market. |
| ASP Per |
What is ASP Per? ASP Per is the unit or frequency by which your product or service is or will be sold to your target market and customer. Dependent on your choice of available options for the ASP Per form field, you may be prompted for additional information to best qualify your response and establish a more clear picture of the revenue value that is expected to be generated. |
| ASP Stabilized |
What is ASP Stabilized? As acceptance of your product or service is generated and achieved, you will have the opportunity to stabilize your standard selling price. Such an opportunity may represent the opportunity to increase the ASP to achieve a better margin (profitability). As product or service volume builds causing unit costs to reduce, ASP may be adjusted down to increase market share and maximize top-line revenue. |
| Competitive ASP | Being able to quantify Competitive average selling price (ASP) informs potential investors of the price advantage that may be enjoyed by your product or service offering in its target market. You have the opportunity to further qualify your competitive advantage with your input to the “value” fields in this section of the DealIQ™ DealIQ™. |
| Reimbursement? | When your product or service offering has qualified to provide consumers with reimbursement opportunities this can quickly generate acceptance of your solution by removing cost-based obstacles. |
| Reimbursement Math |
Amounts are all expressed in terms of average value paid per unit or per sale. Choices for this field include
Depending on the form or reimbursement you may be required to provide additional detail concerning the reimbursement model for your product of service. |
| Launch Region |
Many businesses seek to validate and gain acceptance for their product or service offering by targeting a local or regional audience. Taking this approach often precipitates valuable insight and positive word-of-mouth momentum that can leverage the next steps to scale the business across a large region. Providing answers to questions about launch and scale regions indicates to investors that you have a plan and expectation for sales and marketing execution that in your studied opinion provides the best application of available resources. You can select more than one value for Launch Region. |
| Scale Regions |
Most businesses expand their target market geography as their product or service offering gains acceptance. How will your business scale geographically at full market acceptance? If your market will remain the same as the Launch Region, please select that value again for this field. You can select more than one value for Launch Region. |
| TAM Estimated? | Total addressable market (TAM), also called total available market, is a term that is typically used to reference the revenue opportunity available for a product or service. TAM helps prioritize business opportunities by serving as a quick metric of a given opportunity’s underlying potential. For more information, see the Wikipedia article here: https://en.wikipedia.org/wiki/Total_addressable_market |
| SAM Estimated? | A serviceable addressable market (SAM), or serviceable available market, is the potentially acquirable section of the total addressable market (TAM). Regulatory, pricing and geographical market differences create SAM. To calculate SAM, companies can multiply the target segment of TAM (number of potential customers) by the annual contract value (targeted customers’ average annual revenue). For more information about SAM, SOM, and TAM, Startup EcoSystem™ suggests that you visit this link: https://thinkinsights.net/consulting/tam-sam-som/ |
| SOM Estimated? | The Serviceable Obtainable Market or Share of Market is the part of the SAM that the business can realistically serve. The SOM answers the question, “What part of the SAM is realistic for our business model?” It also helps answer the question, “Who will buy the service from us?” In other words, SOM helps identify the part of the SAM that is most appropriate for our business model. Thus, the SOM shows which sales can be achieved by the business. The SOM is a subset of the SAM that is restricted by: (a) Natural barriers such as distance or language, (b) Limited capacity, for example, production capacity or marketing reach, or (c) Loss of market share to competitors. For more information about SAM, SOM, and TAM, Startup EcoSystem™ suggests that you visit this link: https://thinkinsights.net/consulting/tam-sam-som/ |
| CAGR Estimated? | To perform your business forecast you must have at least an estimate of the expected Compound Annual Growth Rate for the market that you expect to serve with your product or service. Select Yes to indicate that you have at least estimated the CAGR. When you reply Yes, you will be given the opportunity to provide additional information concerning your estimation of your business-related CAGR. |
| Competitor CAGR? | Use this field to indicate your awareness of the Compound Annual Growth Rate experienced by your closest or average competitor. When you answer Yes, you will be given the opportunity to indicate your estimate of the CAGR for your competitor. Providing this information is a strong indication to your prospective investors as to the opportunity that our solution represents. |
Section 5 – Customers
To achieve success, a solid, and often evolving Go To Market or “GTM” strategy must be defined, subject to periodic review and updates that most appropriately position your solution to attract consumers.
| Channel Partners? |
Most businesses use one or more channel partners to execute their Go To Market strategy. Will you make use of one or more channel partners such as commissioned non-employee sales representatives, distributors, wholesalers, retailers, or other 3rd party sales channels? If you have selected channel partners, but due to contract restrictions you are unable to reveal their identity at this time, please select the “No, secret and not publicly available” option. |
| Channel Strategy |
Describing your company’s go-to-market strategy
Here you can rank in order of importance the sales channels that will be used as part of the GTM strategy. You may wish to order according to revenue potential (highest to lowest), the timing of implementation (first to last) or a balance of both. You can enter zero ( 0 ) for any that you don’t plan to utilize. If you are not sure and have not yet determined this yet, simply rank Not Sure at the top and enter zero for the rest. |
| Margin Splits |
Definition of Margin Splits Margin is typically defined as the difference between the selling price for a product or service and the agreed-to cost or cost plus the production and delivery of the item (product or service) sold. When defining a margin split, such distribution of the margin is typically defined in terms of either a percentage of the margin or a fixed value in relation to the margin. Where you sell through more than one channel, your “source” of gross margin is defined by the sales channel through which the sales were made. Example: your product or services sell through 3 channels including direct sales (made by your company sales staff), distribution (your product or service is sold to and through a 3rd party entity or distributor), and some sales are made as a result of efforts of a 3rd party representative to which you pay a commission either upon the making of each sale or when payment is received from the customer for that sale. For this example, we will use a total gross margin for all sales made in an average monthly period of $100,000. Of this Your direct sales effort delivered $65,000 in gross margin, distribution delivered $21,000 in gross margin, and sales made by your representatives provided $14,000 in gross margin realized on your income statement. With this example, you would indicate margin splits of
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| MAP Policy |
What is meant by MAP Policy? MAP, or Minimum Advertised Price is the lowest price that can be publicly displayed for a product on sale. Typically, your business would choose to establish a MAP policy to ensure that its sales channel and network of sellers do not advertise their products below a certain price. As your product expands in distribution, you should benefit from increased revenue. But deep discounts and sales at the retail level can undercut your control over the number of cash consumers pay for your goods. Making use of a minimum advertised pricing policy can help you compete by putting limits on the price offered by online and offline resellers. While retailers can charge whatever they want in-store, they can’t lure new customers by advertising a price lower than the MAP. Startup EcoSystem™ offers the following reference for additional information concerning the use of a MAP Policy. What is a MAP Policy? – Copyright © 2015-2022 Trade Vitality, LLC |
| LTV? | What is the estimated Lifetime Term Value associated with each Customer? For more information on how to calculate LTV, please see the reference here. |
| CAC? | What is your estimated customer acquisition cost = the estimated cost to market to and secure sale(s) from each new customer? For more information on how to calculate the Customer Acquisition Cost (CAC), please see the reference here. |
| Churn? |
Customer churn refers to the natural business cycle of losing and acquiring customers. Every company — no matter the quality of its products or customer service — experiences churn. Generally speaking, the less churn you have, the more customers you keep. For help understanding and calculating churn see the following reference(s): |
| Active Customers | Active Customer(s) include any customer to whom you have made a sale and with which your business continues to provide sales or service support, or who may order additional products or services from your business. Reporting your number of active customers is an indication of business traction and strength. If you are pre-revenue, please simply indicate No active customers. |
| Primary Customer | If you indicate that you have Paying Customers, then being able to specify a primary or key customer provides your business with highly valuable reference and is often one of the keys to prompting consideration of an investment in your business. Naming your primary customer, and allowing them to be contacted as a reference should be strongly considered as a part of your DealIQ™ DealIQ™ readiness. |
| Primary Customer Proof | Customer “proof” is as simple as a screenshot of a customer PO demonstrating that you have been contracted to deliver your solution (product or service) to a key customer. |
| Customers Questions | This is your opportunity to help Startup EcoSystem™ help you! Please consider the two questions presented here in relation to your participation in this section of the DealIQ™ DealIQ™ Survey. |
| Customers Answers | This is your opportunity to help Startup EcoSystem™ help you! Please consider the two questions presented here in relation to your participation in this section of the DealIQ™ Survey. |
Section 6 – Competition and Intellectual Property
Intellectual property protection helps, yet is never the total solution to defending an innovation. The keen insight that understands what drives customer aspirations should result in solution distinctiveness that is hard for others to duplicate. Questions in this section will only appear if your business makes use of or has the need for intellectual property to safeguard its business. Your ability to answer questions in this section serves to quantify and qualify the ability of the business to leverage its unique ideas and products to effectively manage the threats to company success presented by others who are competing for the same customer dollars.
| Direct Competitor Notice |
Why do we care about Competitors? Indicating your knowledge of your existing or potential competitors lets your prospective know that you have a high degree of market awareness. When you lick OK on this field you will have the opportunity to indicate this knowledge concerning at least one competitor. |
| Direct Competitor Name | Enter the name of the existing or prospective competitor. To add more than one competitor, click the + Add Direct Competitor button and a new record will be presented for your use. |
| IP Available? |
Why do we ask about IP? For many offerings related to technical and healthcare products being able to display protection in the form of either provisional, issued, or registered IP in the form of patent, copyright, or protected licensing indicates superior value protection to your prospective investors. Click to indicate the form or type of Intellectual Property protection that you believe your company has or will have when it goes to market. For each type of protection indicated, you will be asked to provide some additional detail for reference by prospective investors. |
| Competitors Questions | Your input regarding the questions in this section helps us to evolve and improve this survey form. As you have an opportunity to return and update, or to create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
| Competitors Answers | Your input regarding your answers in this section helps us to evolve and improve this survey form. As you have an opportunity to return and update, or to create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
Section 7 – Team & Experience
The primary reason that great business ideas fail is not external to a startup — they are internal. Questions in this section quantify the management team’s ability to construct a business plan and build a team that has the ability to execute detailed strategic business plans that are most likely to produce a return on investment. The Team section of the DealIQ™ DealIQ™ asks you to specify the key members of your executive and management team and their roles in the business. Each field in this section of the DealIQ™ DealIQ™ contains field-specific help or instruction.
This section of the DealIQ™ DealIQ™ is of very high value for consideration by prospective investors. Try to be as complete as possible, as in the case of documenting your management team, more really is better as it can positively influence how your ability to execute your business plan is evaluated by prospective investors.
| Board Formation |
Why do we ask about your Board formation? Startup EcoSystem™ offers the following articles as a reference to the value of an experienced board of directors for a startup. |
| Board Vacancies | Maintaining your Board of Directors can prove to be critical to both the near-term formulation of business planning and budgets, as well as to the long-term stability of the evolution and execution of the vision for your business. This field provides you with the opportunity to share your Board needs with the experienced cohort of Startup EcoSystem™ enabling your network to help you meet this requirement. |
| Board Changes | Letting Startup EcoSystem™ Members and other potential investors know the history of your Board enables this network to follow and supplement your efforts to ensure the strength and long-term value and stability of your board of directors. |
| Size of Force |
Why do we ask about the size of force – the size and composition of your team? Knowing and planning for the requirements and structure of your team is a critical element of managing your business for the successful execution of its business plan and achieving your forecast or projections. Categories or team member groups include both compensated (payroll or contract) and board members and advisors. Size of Force asks you to indicate the number of Full Time Equivalent (FTE) members on your team for these categories.
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| Employee Base |
How do I specify my Employee Base? Employee base values are required for two categories. You will need to specify the actual number of employees (or contractors) for these two categories allowing prospective investors to be aware of the size of your workforce in terms of individual team members.
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| Employee Payroll |
For each category of team member (payroll and contracted) please indicate the average MONTHLY amount paid including all taxes and benefits.
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| Org Plan Doc |
Depending on the growth stage of your business, making use of an organizational plan or “org chart” may or may not be of value. Typically, once your business has reached a state where it has more than 4 departments or functional managers, more than 20 employees, or more than one operating location, having an organizational plan can be of significant value to the efficient operation and decision-making within your organization. Startup EcoSystem™ has identified the following reference articles to provide you with additional guidance with the creation and use of an effective (and evolving) organizational plan and chart to match the business plan. |
| Labor Plan? | Your labor plan is a key element of any business forecast or budget. With a labor plan the challenge is to consider the team member requirements in terms of both payroll and non-payroll members, the role that each will play in the realization of your business plan, the timing of their addition to (and potentially their retirement from) the business, and their cost to the business. These elements must be part of any forecast that you present to prospective investors. |
| HR Manual? |
It is generally accepted advice and practice that every business should (must) have a well-defined human resource or employee manual as soon as it begins to require and hire employees beyond the business founders. If your business has grown to or beyond the MVP stage, having an HR Manual defined tells your prospective investors that you are taking steps to ensure the appropriate consideration and management of its employees. Startup EcoSystem™ has identified the following reference links for instruction and the importance of defining a human resources manual. |
| Team Questions | Your input regarding the questions in this section helps us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
| Team Answers | Your input regarding the questions in this section helps us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
Section 8 – Approvals & Protection
Even free and open markets have many rules of compliance and fair dealing that, if violated, can end a company overnight. Questions in this section quantify the costs of adhering to the rules of trade so that progress does not get interrupted by a governing authority or legal proceeding.
This section will only appear where your business is subject to regulatory approval or intellectual property licensing or protection.
| Regulatory Notice | When you indicate that at least one form of government licensing or approval may be needed for your business to go to market with its core solution, you will be required to submit further information concerning the approvals that will be necessary to legally offer your solutions. This may include, but it not limited to, business licensing, professional licensing, environmental approval, health or safety testing certifications or approvals, physical or information security compliance, cross-border trade or hazardous materials permits, etc. You can click to add as many rows as required to list each combination of approval type and locational jurisdiction, however, you may combine multiple jurisdictions in one row if there is a single, common approval process that grants approval to all included jurisdictions simultaneously. |
| Regulatory Identification | For each approval required, this section allows you to select and specify the jurisdiction for which the approval is required together with the identity of the approval authority, approval type granted or expected approval date, approval status, and identification number and duration. |
| Legal Questions | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
| Legal Answers | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
Section 9 – Finance & Accounting
Ultimately, starting and investing in companies is a financial proposition. The first inputs are monetary, the fuel for the engine is monetary, and the final outputs and ultimate measure of success are monetary. Questions in this section turn plans developed so far into currency measures so that investors can evaluate the financial assumptions being made by the company as well as its room for error and still maintain liquidity.
| Use of Funds | When you are seeking funding from investors, it is imperative that you be able to list for prospective investors how and in what amounts you expect to apply the proceeds from your funding round toward achieving your business plan objectives. Use of Funds provides you with the ability to quickly select areas of the business to which funds are expected to be applied, and the amount of the funding round to be applied to each selected use. Note, that the total lists in Use of Funds should match the stated size of the funding round. |
| Projections Possible? | You should be able to provide either projected quarterly or annual financial projections. The DealIQ™ DealIQ™ form will allow you to enter your income statement projections for revenue, cost of goods sold (or services provided), operational expenses, and your balance sheet projections for assets and liabilities. Startup EcoSystem™ has specifically designed the fields used in support of entry of your projections to both make entry easy and to allow comparison with successful offerings made by similar businesses so that when you choose to subscribe to the Full DealIQ™ Deal Condition Report or DealIQ™ “Full DealIQ™”, you will be able to receive and review the real-world condition of your offering. |
| Annual Revenue Table | The Annual Revenue Table gives you the ability to quickly list your lines of revenue and the amount for each that you are currently projecting for each of the next 5 years of operation. |
| Annual CoGS Table | Like the Annual Revenue Table, the Annual CoGS Table is set up to allow for quick entry of the projected cost of goods or services sold by Revenue line as you have defined in the Annual Revenue Table. |
| Operation Expense Table | Using the Operation Expense Table allows you to quickly provide figures for your operational expenses. The rows of the Operation Expense table are pre-defined for you and may require you to segment or combine your own information in order to accurately answer. All of the listed expenses would appear on your business profit & loss statement, and any expense you have that you expect to see in your profit & loss statement, contributing to EBITDA, should be able to be categorized within one of the operational expense types defined. You may enter $0 for any period within which there are no expenses of the associated type. |
| Non-Operation Expenses Table | Non-operational costs are those that don’t contribute to EBITDA but that do still drain company cash available. For the purpose of the Deal Condition Report, you can ignore non-cash costs (depreciation & amortization), however, investors must be aware of and understand the obligations of the company that must be paid and may be subject to the use of investors’ funds. |
| Insurance |
Why do we ask about insurance? Every business is subject to financial risks. When you indicate the forms of insurance that you have secured for the benefit and protection of your business, its activities, employees, and potential liabilities, you are also notifying investors that you have affected the appropriate insurance protections thereby reducing these concerns from investment considerations. |
| Current Assets |
Providing information concerning current business assets is key to establishing the intrinsic real or foundation value of the business at the time of your funding offering. Elements of Current Assets include:
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| Capital Assets Table | Almost every business requires investment in capital assets, or assets subject to amortization or depreciation. Use the Capital Assets Table to quickly enter the long-term asset investments made and the value of each capital investment made for the benefit of your business. Long Term or Capital Assets typically have a useful life of at least 3 years. The amount entered for each capital asset should be the actual amount paid to acquire the asset and add it to your business balance sheet. |
| Current Liabilities Table |
Current Liabilities are those for which payment is required in less than 12 months, and in some cases may be recurring monthly expenses. Do not include amounts owed for repayment via multiple payments that extend beyond 30 days. In this table, you can quickly enter values for any of the following:
For each item entered, please indicate the current value owed. |
| Cap Table |
Your Cap Table represents the summarized sources of equity capital used to finance your business. For each prior round that you have indicated, there should be at least one corresponding row entered into the Cap Table on the DealIQ™ DealIQ™ survey form in this table. For each row, you will be required to enter:
To assist you entry of the Round Name or Type, you will see displayed the Name(s) for each Past Round displayed above the Cap Table. |
| Bean Counter Questions | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
| Bean Counter Answers | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |
Section 10 – Exit Strategy
The final area of investment risk is that of the deal structure itself. Questions in this section define every aspect of the offering to investors and then explore exit potentials to help investors calculate the range of likely return on their investment in this round.
| Exit Trigger |
What is an Exit Trigger? An exit trigger is typically one or several events that may occur in the lifecycle of a business where the opportunity to have the business move to a different stage, hopefully of higher valuation. The DealIQ™ DealIQ™ Exit Trigger field provides the opportunity to indicate the most likely event(s) that will lead to such an exit. Startup EcoSystem™ suggests the following references for your consideration when defining your most likely exit triggers and strategies. |
| Exit Structure |
Exits may take many forms as shown in the list of Exit Triggers. Having a good idea as to the most appropriate structure for the structured exit for your business can lead to your achieving higher value for all stakeholders. Startup EcoSystem™ suggests the following reference for your consideration when defining your exit structure. |
| Comparable Exit Analysis |
Exit Valuation Analysis can be accomplished via several methodologies. Before you present your exit strategy, it is essential that you understand the methodology that is best applied to your business. Startup EcoSystem™ recommends these sources for Exit Analysis information, methods, and templates. |
| Lead Investor |
What is a Lead Investor? A lead investor is an investor that initially sets the key terms of the capital raise, usually by issuing or signing a term sheet. They are the primary investor and negotiate the transaction documents to ensure they reflect the agreed terms. The terms that you negotiate with the lead investor will apply to all the investors participating in the round. Startup EcoSystem™ suggests the following resources for more information on finding, qualifying, and selecting a Lead Investor and the role that the Lead Investor can play to best ensure the success of your funding-raising effort(s). |
| Term Sheet |
What is a Term Sheet and How is it Defined? When fund-raising, the most important information you must be able to present is a well-defined Term Sheet. The Term Sheet for your offering presents investors with a statement of what you are offering in exchange for their investment (money), typically in one of the following forms. (1) convertible debt in the form of a promissory note that upon certain conditions will convert to equity in your business, or (2) common or preferred equity. Startup EcoSystem™ suggests the following references as potential sources of guidance as to the importance of your Term Sheet and how to construct or negotiate a term sheet. |
| Purchase Agreements |
What is a Purchase Agreement? A business purchase agreement is a legal document typically used when buying and selling a business. The purchase agreement(s) specify the outline for the terms and conditions associated with the purchase transaction and allow for a meaningful fair market valuation of all company assets and liabilities. A poorly written agreement(s) can fail to serve the purpose intended by either or both parties to the transaction and result in unintended and unwanted legal consequences for either party. There are many available references and resources with regard to the content and creation of a business purchase agreement. Here are a few of these for your review as may be desired. |
| Current Valuation |
What is the Current Valuation? Business valuation is the economic value of a whole business or company unit. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings. Business owners often make use of professional business evaluators to obtain an objective estimate of the value of the business. There are many available references to provide you with a clear definition of business value and methods of valuation. Startup EcoSystem™ offers quick access to a few of these here for your review as may be desired. |
| Interest Rate |
Recommendation on specifying Convertible Note Interest Rate
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| Liquidation Preference |
What is Liquidation Preference? There are many available references and resources with regard to liquidation preference. Here are a few of these for your review as may be desired. |
| Anti-Dilution Rights |
What are Anti-Dilution Rights? There are many available references and resources with regard to anti-dilution rights. Here are a few of these for your review as may be desired. |
| Pro-Rata Rights |
What are Pro-Rata Rights? There are many available references and resources with regard to pro-rata rights. Here are a few of these for your review as may be desired. |
| FROR |
What is a First Right of Refusal? There are many available references and resources with regard to the specification of the first right of refusal. Here are a few of these for your review as may be desired.
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| Co-Sale |
What is meant by Co-Sale? There are many available references and resources with regard to the definition of co-sale or “tag along” rights. Here are a few of these for your review as may be desired. |
| Drag Along |
What is meant by Drag-Along? There are many available references and resources with regard to the definition of shareholder or noteholder drag-along rights. Here are a few of these for your review as may be desired. |
| Redemption Rights |
What are redemption rights? There are many available references and resources with regard to the definition and use of stock or note redemption rights. Here are a few of these for your review as may be desired. |
| Conversion |
What is Conversion? A conversion event in angel investment is when a convertible note is converted into another form, typically either preferred or common equity in the associated business. Startup EcoSystem™ recommends the following resource as one source of information on the use of convertible debt, also known as a convertible promissory note as a method of structuring investment in your business.
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| AITCS |
What is an Angel Investment Tax Credit? Angel Investment Tax Credits are offered by more than 30 states where the use of these tax credits is defined to promote early-stage businesses to start operations in those states in exchange for the state-sponsored tax incentive going to the benefit of an angel and similar early-stage investors. Your qualification to one or more AITC programs often serves to provide additional motivation to prospective investors considering your offering. Note that AITCs are in addition to the tax incentive that Investors can enjoy when your offering is qualified to Internal Revenue Code Section 1202, which is also called the Small Business Stock Gains Exclusion. Startup EcoSystem™ suggests the following reference sites to improve your understanding of AITCs and the states which offer them. |
| Investor ROI |
How do I indicate Investor ROI? Any early-stage or start-up business is considered very high risk, no matter what the business is. As a result, Angel Investors want a higher return in exchange for this risk and ideally 30-40% ROI. Some will accept less and some will want more, but this should be your realistic target and objective. Many references exist for how to calculate and indicate projected investor ROI. One such example reference is found here: What is your potential ‘return on investment’ for an Angel Investor? |
| Deal Terms Questions | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business.– |
| Deal Terms Answers | Here is your opportunity to provide your input regarding the questions in this section help us to evolve and improve this survey form. As you have an opportunity to return and update or create a new version of this form, the improvements that result from your input should prove to be of value to your business. |