July Edition 2024

38 At OurCrowd, our team of investment professionals sees over 100 new opportunities every month, and perform extensive due diligence, carefully vetting and selecting investment opportunities we bring to our platform. The recent economic downturns or uncertainties led to reduced availability of capital as investors are becoming more cautious, and are prioritizing startups with proven traction, strong revenue growth, or those addressing critical needs heightened by economic shifts. This also allows investors to negotiate better terms and take advantage of the market situation to set discounted valuations. What key factors make a startup attractive to early-stage investors, and how can legal counsel enhance these factors? Early-stage investors look for several key factors when considering investing in a startup: 1. Strong Team: Investors prioritize startups with a capable and experienced team. 2. Market Opportunity: Addressing a sizable and growing market opportunity. Investors seek evidence of market demand, potential for growth, and scalability. 3. Product or Technology: Investors assess the startup’s product or technology for innovation, differentiation, and defensibility 4. Traction and Milestones: Evidence of early traction, such as revenue growth, partnerships, or product development milestones. 5. Business Model: Scalable business model that outlines revenue streams, pricing strategy, and path to profitability. Legal counsel can assist in properly structuring the startup (entity, founder agreements, equity distribution), and in preparing investment documentation (term sheets, shareholder agreements, subscription agreements). These documents protect both the startup and instill confidence in investors regarding operational efficiency. What are the most effective strategies for startups to attract and secure seed or angel investors today? Can you provide examples of innovative financing structures or terms that have been successful? • Build a strong network to connect with potential investors. Attend industry events, pitch competitions, and networking gatherings to build relationships.

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