• Stone & Chalk released a guide to capital raising for startups.
• The guide was developed in partnership with companies including venture capitalists Airtree and NAB Ventures, as well as the ASX.
• It identifies what venture capitalists are looking for, explains the different funding rounds, and reveals what you should include in your pitch.
• Visit Business Insider Australia’s homepage for more stories.

Innovation hub Stone & Chalk have released a new guide for startups on raising capital.

Stone & Chalk provides innovation services to early stage tech companies, businesses and the government, with bases in Sydney, Melbourne and Adelaide.

This month, the firm released a free, 42-page capital raising guide for startups which goes through the process of – you guessed it – raising capital. The guide was launched with companies including Airtree (which backed design powerhouse Canva and education platform Edrolo), the ASX, and NAB Ventures.

It provides a range of handy tips on raising capital, with explanations on the different types of funding rounds, the different ways you can raise capital, what venture capitalists (VCs) look for and how to go about pitching.

What venture capitalists look for

When it comes to what VCs look out for, Stone & Chalk points to six key areas: the market, product, capabilities, growth, financials and exit.

In terms of the market, it asks questions like “Is there a market for your product or a big enough problem to be solved?” For your product, the guide asks questions like “How is it different?” “Is it solving a problem in a unique way?” “Do you have IP that your competitors don’t have?”

Capabilities refer to the skills and experiences of your team, while growth comes down to metrics like monthly revenue, how many units have been sold, or how many users have been acquired.

Financials relate to the profit margin and annual recurring revenue, while exit looks at the potential buyouts and opportunities for exiting.

The 12 key pitching slides

When it comes time to pitch, Stone & Chalk says all founders need two different presentations: a pitch deck and an investor deck. The pitch deck is what you whip out when pitching on stage or to an audience. It tells the story of your start up and the problem it solves in simple terms with basic information and images to support it.

Then there’s the investor deck, which is usually sent out to a meeting ahead of time. This deck uses more business terms and discusses the startup’s strategy in more detail.

Also included in the guide is a 12 page slide outline for when you pitch. Here’s what each slide should include:

1. Introduction

The name of your startup and what your purpose is in a sentence.

2. Key insight story

How you discovered the problem (or need) and what you’re doing to solve it.

3. Problem statement

What the problem is and how current companies are either approaching or neglecting it.

4. Relevant market opportunity

This is where you identify your market, target customer and the size of your target market.

5. Competitors

Who your competitors are, and where your company sits in relation to them.

6. Your solution

What is your unique selling proposition? What makes it a game changer?

7. Competitive advantage

What do you have that’s hard to replicate?

8. Your team

Your team’s startup experience, expertise and history.

9. Traction

Your timeline, any milestones and any customers you have.

10. Business model

Key financial stats and revenue streams.

11. Financial status

This is where you outline your historical finances and projections related to your product.

12. Raise

This is where you mention how much capital you’re looking to raise and for how much equity.

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