Most raises follow the same arc, whatever the sector: you decide you are ready, you settle the structure, you build the materials, you take them to investors, you negotiate headline terms, and you close. Understanding the sequence — and what each step actually commits you to — keeps the process clean and stops it stalling at the moments that matter most.
Step 1 — first principles: are you ready?
Before approaching anyone, be honest about readiness. Do you have a defensible use of proceeds, a financial model you can stand behind, and a clear story about why this raise, now, at this size? A readiness diagnostic flushes out the gaps early — a half-built model or an unclear cap table will surface in diligence anyway, far more expensively, once an investor is already at the table.
Step 2 — structure the raise
Structure is the quiet foundation. It decides the vehicle investors subscribe into, the jurisdiction whose law and tax apply, the instrument (equity, convertible or debt), and how money flows in and profits flow out. For Zimbabwe-linked raises this is also where exchange-control and ZIDA questions get settled. Structure first, because every later document — the term sheet, the subscription — assumes it.
Step 3 — build the materials and the data room
- A teaser — a short, anonymised summary that gets an investor to take the call.
- An information memorandum — the full story: market, model, team, use of proceeds, risks.
- A financial model an investor can interrogate, with assumptions made explicit.
- A data room organised to answer a standard diligence questionnaire without a scramble.
This is the bulk of the work, and most of it happens before a single investor commits. It is exactly what a fundraising advisory engagement is built to deliver.
Step 4 — approach investors (behind an NDA)
When you open the data room to a prospective investor, you are sharing genuinely sensitive information. A non-disclosure agreement signed first restricts how that information is used and keeps the existence of the raise confidential. Use a one-way NDA when only you are disclosing; use a mutual NDA when both sides will share. This is the standard first document of any real investor conversation.
Step 5 — the term sheet: first real commitment
When an investor is serious, headline terms go into a term sheet: the amount, the valuation, the instrument and the governance the investor expects. Most of a term sheet is deliberately non-binding — it is subject to contract and diligence — but a few clauses usually bite immediately: exclusivity, confidentiality and costs. The term sheet is the hinge of the whole process: the moment interest becomes intent.
A term sheet is not the close. After it come diligence, definitive documents and the conditions to completion. But a clean, well-understood term sheet is what gets you there — it aligns both sides on the shape of the deal before anyone spends money on lawyers.
From here to close
After the term sheet the deal moves into definitive documentation and completion — the subscription, the shareholder arrangements, the board approvals. Those are legal instruments best prepared with counsel. The job of the raise process up to that point is to arrive at the term sheet with a credible structure, complete materials and an aligned investor. Get that right and the close becomes mechanical.