What materials should you use when meeting investors?

The three most commonly confused documents when preparing to meet investors are the annual report, capability statement, and fundraising presentation. They may seem similar as they all discuss the business, but each serves a distinct situation. Choosing the wrong type not only wastes effort in creating the documents but can also lead the meeting off track from the start.

Three situations, three types of documents

Before deciding what to do, you need to clearly identify which situation you are in among the three situations below. This is the first question Sinh Vũ asks in every corporate document project.

• Currently raising new funds: What investors read is the pitch deck or summary memo. They need to look forward, not back at the past.
• Periodic report for existing investors: This is when the annual report truly plays its role. This document reflects on a past period, presenting data according to accounting and corporate governance standards.
• Winning contracts or bids: This is when the capability profile is used. The audience is business clients, not financial investors.

Why is the capability profile not for investors?

A capability statement is built to win new business, meaning it persuades a client that your company has the capacity to execute a specific project or contract. What the client wants to know is: what you have done, what team and processes you have, and why they should choose your company over competitors.

Financial investors want to know something completely different: is the business model profitable, is the market large enough, can the founding team execute, and where will the capital be used? The capability statement is not designed to answer these questions.

Common errors when preparing documents for investors

• Bringing the annual report to raise new funds: The annual report contains many past figures, accounting standards, and management content. Funds considering investment do not need to look back; they need to see the future. Presenting documents incorrectly can derail the meeting from the start.
• Confusing capability documents with investment materials: Capability documents focus heavily on services and portfolio, while providing little information on financial models and growth strategies. Investors often lack sufficient information to make decisions after reading them.
• Creating an annual report just to look good: If the data inside is still messy and hard to read, an attractive design on the outside won't save the content. The core of an annual report is to turn heavy data into charts that can be read in seconds.

Sinh Vũ's viewpoint

When you come to Sinh Vũ for investor materials, the first question we ask is: are you raising funds, reporting, or closing a deal? That answer determines everything else.

If it is an annual report, Sinh Vũ's role is to condense heavy data into charts and tables that can be read in seconds, while ensuring the entire document looks like it was written by the same company rather than pieced together from different departments. Financial data and accounting standards are parts that you and the finance department must approve; Sinh Vũ will handle the narrative flow and data presentation.

If it is for fundraising, Sinh Vũ helps build the deck and memo, and does not recommend you create an annual report to meet with investors, as that is the wrong tool for that situation.

For a funding round, the documents investors read are the deck and summary, not the quarterly report.

Y Combinator, A Guide to Seed Fundraising