Milestones

I had a very nice discussion today in a board of a company that is looking forward to raising venture capital. We were talking about milestones, specific goals and tasks that the start-up was willing to accomplish in order to succeed.

The milestones slide is usually one of the most difficult slides to define when preparing a VC presentation. Venture capital investments are usually "staged." A certain amount of money is invested right away and additional money is invested later, as certain milestones are reached. From the company's perspective, it's important that these milestones are clearly defined and reasonably obtainable.

Investors love to see different things in the milestones slide. For me (I love simplicity, maybe different investors would think different ways of structuring this slide), a milestones slide should try simply to structure the future of the company into two or three stages, and define for each stage three things:

• What is the company going to do (where is the company going to spend money)
• How much will it cost (and therefore, when does the company need the money and how much is it for every stage)
• What would be the end result of it (goals accomplished, providing a good framework to evaluate the progression of the start-up)

It is as simple as that, but it takes a lot of perspective, clarity of goals and commitment from the start-up, as it establishes compromises that will be probably linked to the investment.