From Pitch to Term Sheet: A Practical Guide for Female Founders Raising Equity Investment

In our final installment catching you up on our ‘Fund Her Future’ webinar series, we’re focusing on what the next steps are for female founders who’ve decided raising equity investment is the right path for them.

We spoke with angel investors, venture capitalists and legal experts to produce this guide for female founders raising equity investment. Here is some valuable advice on what to do and what to avoid when preparing to approach investors for your start-up.

1. Know Your Numbers

Before you seek out potential investors, you must be sure of your numbers. Accurate financials are a key factor in building investor trust and credibility. Investors want to see a clear, data-backed understanding of the business’s current performance, revenue streams, costs, margins, and projections. 

If you’ve ever seen an episode of Dragon’s Den you’ll know what happens when a founder can't confidently recall or speak about their figures - it’s not pleasant. Moreover, if you can't clearly explain your financials, it raises red flags about how well you understand and manage your business.

Ensure your numbers are thorough and accurate by:

• Keeping your bookkeeping clean and up to date

• Working with an accountant or financial advisor to validate your figures

• Tracking key metrics like cash flow, burn rate, CAC, and LTV

• Building a detailed, realistic financial model with clear assumptions

• Stress testing your model to prepare for best-case, worst-case, and most-likely scenarios

It’s also a good idea to practice explaining your numbers so you’re ready to confidently walk investors through your financials and assumptions.

Members of Breakthrough Labs are able to attend and take part in pitch practice sessions as part of their membership. It’s also a great time to join us as we’ll be offering a masterclass in financial storytelling in October for our members - given by an investor. Find out more about membership.

2. Know Your Narrative

   
   

A compelling pitch needs a strong narrative. Investors will want facts, figures and forecasts but they’ll also want or know your story. 

You can achieve this with:

• A pitch deck that clearly tells your story - covering the problem your tech product or solution hopes to solve, the journey so far and your vision for growth. Keep it concise and visually engaging.

• A clear explanation of why you're raising funds - what the capital will be used for, how it will move the business forward, and what milestones you expect to hit.

• Your motivation and skills - tell investors why they should believe in you to spearhead this venture. Tell them about your unique skills and insight into the market.

As Louise from HearstLab told us, “Investors want to back the right business- and the right founder”.

3. Build Your Data Room Early On

   
   

“Don’t wait until you’re raising — build your data room as you go.” - Vanesa from from NoBa Capital 

A data room is a secure, organised repository of documents that investors will want to review during due diligence. Having it ready early shows professionalism and saves time during the fundraising process. It also prevents scrambling to pull together critical documents at the last minute, which can slow down or even derail a deal.

Contents of your data room might vary slightly depending on the investor but, at a minimum, it should include:

• Financials: P&L, pipeline, forecasts

• Legal docs: Incorporation, employment contracts

• Cap table and share structure

• IP documentation

• Employee CVs

4. Know Who You’re Pitching To

Avoid the rookie mistake of sending a generic deck to every investor. Investors each have specific focus areas which may include stage, sector, geography, and size. They don’t want to waste time on pitches that aren’t a fit. Reaching out blindly shows a lack of research and can hurt your credibility. Remember, it’s a small world! Neglecting to tailor your approach for each investor can also mean missing out on opportunities.

Hearst Labs, for example, only invest in female founders and yet, “I still get pitch-decks from male-led teams every week,” Louise told us.

It’s important to do your research on each investor and ensure you:

• Understand their thesis

• Know what stage they invest at

• Personalise your approach (especially for your top priority investors)

5. Find The Right Fit - and Don’t Settle

Welcoming an investor onboard is a big deal. Your business is important to you and the people you work with as you build and grow will be instrumental. So it’s essential to find the right investor and ensure you’re happy with the terms.

“Desperation leads to bad deals. Step back and explore alternatives.” – Vanesa

Your investor should be a long-term partner, so make sure you’re confident that they’ve:

• Backed businesses like yours

• Your values align

• They’ll support you when things get tough

6. Understand the Terms

Taking time to understand and - if necessary - negotiate your term sheet, is one of the most important steps in raising funds.

Don’t sign anything you don’t fully understand. It’s crucial to get expert legal and financial advice to make sure the terms work for you now and in the long run. A rushed or poorly negotiated term sheet can lead to regrets down the line, especially around control and ownership.

Pay close attention to:

• Valuation – It affects how much of your company you’re giving away.

• Dilution – Understand how your ownership changes now and in future rounds.

• Control clauses – Look out for investor rights, veto powers, and protective provisions.

• Board rights – Who gets a seat at the table, and what decisions require their input?

• SEIS/EIS advance assurance – Make sure you have this in place to make your round more attractive to UK investors.

“The term sheet is your prenup. You’ll live with it long after the cheque clears.” – Malin, Freeths LLP

Your term sheet isn’t just paperwork. It sets the tone for your entire relationship with investors, so take it seriously.