Catégorie
1. Structure & Governance
Sous-catégorie
1.3. Funding
Stade
Pre-Seed
What is at stake?
What must be considered in your search for investors in your startup?
Why is it important?
When founders opt for dilutive financing, they accept bringing investors into the capital of their startup. It is essential then to ensure that the investors share the same vision as the founders. This alignment must also extend to the importance of ESG criteria, which are increasingly taken into account by investors.
Three actions to implement right now
1️⃣ Ensure alignment of investors with the startup
- Identify funds whose expertise aligns with your startup's needs.
- Consider the ethics and reputation of the fund (e.g., evergreen funds, feedback from startups in the portfolio, etc.).
- Analyze the consideration of ESG criteria in the funds and the dedicated support on these issues.
For us, the criterion of sensitivity to impact is important in choosing our investors. A partner who shares our convictions and our vision of impact gives us the assurance that our values and mission will be preserved in future decisions.
Marie Voyer, CPO & Co-founder of Qweeko, Alumni EDHEC Entrepreneurs & Future 40 (2022)
2️⃣ Be able to address the ESG criteria with investors
- Reflecte on and initiate an ESG strategy (see Formalization of an ESG Strategy).
- Incorporate ESG criteria in pitches to investors.
- Determine the main KPIs to communicate about these criteria.
3️⃣ Align before the fundraising closing
Be clear with the investors about:
- financial clauses (especially the preferential liquidation to avoid any resentment)
- their role and any desire to have control over the company, i.e., their political power (see the document: Formation of a Board and Executive Committe)
- the distribution or non-distribution of investors into different categories
- the terms of sharing value with employees (see the document: Value Sharing with Employee)
Discussing these crucial topics in advance encourages a healthy relationship the investors from the beginning and filters out those who would not be aligned with your vision and needs. Be demanding in your relationships with your investors!
Serge Rosenzweig - Business lawyer, specialized in advising entrepreneurs and startups.
📚 Further Reading
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📖 Impact Financiers Mapping (Mouvement Impact France)
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📝 Term sheet (The Galion Project)
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🔍 Examples of ESG Term Sheet
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