The discussion below focuses on key considerations for a cleantech or clean energy startup preparing for Series A financing. Preparation includes creating a compelling narrative for potential investors, gathering relevant documents and materials, and making a plan for your fundraising process.

Part I: Preparing to raise your Series A

There is no one-size-fits-all approach. Each startup’s narrative will be unique and will depend on a number of factors. Deciding which factor(s) will grab the attention of investors during preparation is key when developing an effective pitch. In fact, your narrative may need to be customized depending on the specific investor because one “pitch” does not fit all, as discussed further below.

7 Questions to Guide Your Company’s Unique Narrative

Here are some of the main questions and factors to consider when assembling your materials and formulating your narrative:

1. What is the problem you are solving for and/or what is the opportunity you are capturing?

2. How are you solving the problem?

3. How does your product/service work?

4. What is your business model?

5. How much traction have you had thus far? What is your vision for the future?

6. What is the market landscape, and how do you see it growing over time?

7. Who are your key team members and what management processes do you have in place?

Try to answer these questions above before you start assembling your pitch deck. When you are ready to assemble your Series A pitch deck, check out this how-to guide.

In preparing the narrative and financial plan, as a clean energy or cleantech company, you also need to be acutely aware of and account for the regulatory environment applicable to the industry or business sector and where your company fits within the industry or business sector. Using simple, memorable key takeaways, the goal is to succinctly and clearly explain the intrinsic risks, how they will be mitigated, and how they can affect your operations and bottom line.

Personalize Your Pitch

How you frame the narrative will likely not be the same for each potential investor. The most effective story will depend, in part, on you understanding who the investor is and to whom you are presenting; what the “hot buttons” are; and what they expect from their portfolio companies.

For example, your explanation of how your company provides value to end-users will be different for strategic investors (e.g. potential customers) than it is for large diversified venture capital (VC) investors or impact investors.

With respect to VC and impact investors, it will be critical to be prepared to clearly breakdown and articulate:

  • the regulatory environment;
  • the value proposition that your product or service provides; and
  • how your company fits in with the overall value chain of the sector.

Nevertheless, it is important to focus on identifying potential investors that would be a good fit by targeting those that have synergies with your business (historically invest in your business sector, lifecycle stage, industry, geographic region, etc.) and your company satisfies its investment criteria.

Compile a list of these target investors. It should be long: you will likely need to talk to 30 or 40 prospective investors (or more) to secure your lead. Also, be sure to start these conversations with investors before you actually need the money. Fundraising is a long and time-intensive process; by connecting with investors early, it allows you to build a relationship and enables the investor to watch your progress over time.

Part II: Documentation needed for due diligence

Okay, so you’ve honed your narrative, developed your materials, and begun conversations with investors. You may be worn out from all the coffee chats, but there’s still more to do: due diligence. Below we share a preliminary checklist of the documents that you will need to provide in connection with a Series A financing.

Best practice is to organize your documents in an electronic data room hosted on your own server, on your counsel’s Extranet, or via another service provider, such as or Carta. As the information must be kept confidential, be sure to verify any third-party provider’s security measures and history before using them.

Due Diligence

When preparing for due diligence, it is helpful to remember that due diligence should tell the full story of the company via its document history — which means that you share “the good, the bad and the ugly.”

Due diligence is the opportunity for a company to disclose “the mistakes” and to explain how the mistakes were identified, what was learned, and how leadership corrected the mistakes and put processes in place to ensure they were not repeated.

No company has a perfect history. Due diligence is a company’s opportunity to manage the narrative.

Failure to Disclose

It is also important to understand that failure to disclose material information may constitute securities fraud. A claim of securities fraud gives investors the right to demand that the company repurchase the Series A Preferred Stock previously issued and, under some circumstances, to sue the company for as much as three times the amount that they invested.

As you can imagine, the reputational damage of such claims or awards is significant. Hence, due diligence is also the process by which the company is protected.

Series A Preferred Stock Purchase Agreement — or the SPA

As you prepare to issue Series A Preferred Stock, you will come to understand that part of the documentation that you will sign is a Series A Preferred Stock Purchase Agreement (the SPA).

The SPA contains a list of representations that the company makes about its formation, employees, financial condition, board of directors and business operations. These representations are detailed and very specific. If the company is unable to make one or more of the representations, it has the right to modify them by providing additional information as an exhibit in a Disclosure Schedule. The exhibit to the Stock Purchase Agreement should reference information provided in the data room.

Accordingly, to help ensure that your due diligence is complete and well organized, the following is arranged in the proximate order that the representations appear in a SPA.

Document Checklist

1.              Formation Documents:

(i)             Certificate of Incorporation and all amendments for the Company.

(ii)           Bylaws, including all amendments for the Company.

(iii)         List of subsidiaries, and Certificate of Incorporation and Bylaws for each subsidiary, if any.

2.              Capitalization:

(i)             Capitalization Table (current) for the Company.

(ii)           Proforma Capitalization Table for the Company which reflects the ownership of the Company on a fully-diluted basis (reflecting potential post-money investment including all additional stock options that may be authorized in connection with the Series A Preferred Stock).

(iii)         Capitalization information for each of the subsidiaries, if any.

3.              Equity Issuances:

(i)             List along with copies of all SAFE Agreements.

(ii)           List along with copies of all Convertible Promissory Notes.

(iii)         List along with copies of all Series Seed Documents.

(iv)          List, along with copies of all agreements pursuant to which the holder is entitled to purchase/obtain equity in the Company (including warrants, rights or options not otherwise listed above in this Section 3).

4.              Minute Books:

(i)             Board of Directors: Consents and resolutions of the Board of Directors, including (A) the election of the initial Board of Directors; (B) the election of the current officers; and (C) the authorization of the issuance of the Series A Preferred Stock.

(ii)           Stockholders: Consents and resolutions of the stockholders of the Company, including the election of the initial Board of Directors.

5.              Litigation:

(i)             List of any and all pending actions, claims, proceedings, arbitrations, complaints and charges or investigations, with brief descriptions of each.

(ii)           List of any and all threatened (in writing or otherwise) claims, complaints, or charges with brief descriptions of each.

6.              Intellectual Property:

(i)             List of all patents (including applications, Provisionals and utility patents).

(ii)           List of all trademarks, service marks, and tradenames and domain names (both filed and common law), along with copies of all trademark filings made and issued by the Patent and Trademark Office (or any state agency).

(iii)         List of copyrights, proprietary rights etc. along with copies of all relevant filings.

(iv)          List of all software owned or licensed by the Company.

7.              Employees:

(i)             List of all current employees, including a brief description of position, salary and compensations (including bonus and benefits).

(ii)           Copies of all offer letters and employment agreements for current employees.

(iii)         List of all former employees (including copies of their offer letters, employment agreements, if any, and separation/termination documentation, if any).

(iv)          Intellectual Property Assignments.

(v)           Copies of employee stock option plan along with listing of grantees and relevant stock price (which should also be reflected in the Cap Table under Section 2.

8.              Material Agreements:

(i)             List of all material agreements to which the Company is a party including all bank agreement, notes, license agreements, contracts, mortgages, customer contracts, listed separately along with copies thereof including all amendments, waivers or forbearance agreements.

9.              Financial Statements:

(i)             Annual Financial Statements for the three most recent fiscal years.

(ii)           Quarterly Financial Statements for each fiscal quarter in each of the three most recent fiscal years.

(iii)         Monthly Financial Statements for each month in each of the three most recent Fiscal Years.

(iv)          Budget (both for the last three fiscal years and for the next fiscal year).

10.           Tax Returns:

(i)             Copies of Federal Tax Returns filed by the Company for each of the three most recent fiscal years.

(ii)           Copies of each State Tax return filed by the Company for each of the three most recent fiscal years.

Note: Where the company has an especially unique product or relationship, additional items and details should be organized and provided, along with an annotated index for the data room to facilitate review.

After your cleantech or clean energy startup prepares for Series A financing, Clean Energy Trust invites you to apply for investment. Clean Energy Trust’s 501vc® Seed Fund invests $100k — $300k in early-stage cleantech startups in the Mid-Continent region of the United States. Learn more and apply at the following link

Join us back here next month for another blog post in this ongoing series focused on preparing for Series A financing.

Mike Malfettone

Mike Malfettone is a corporate, M&A and transactional attorney with an expertise in the energy ‎‎sector, particularly renewable power, clean energy and energy transition technologies. Mike’s ‎‎practice focuses on representing public and private companies, entrepreneurs, and venture capital, private equity and ‎‎strategic investors with debt and equity financings and M&A transactions. Clients ‎‎also look to Mike to help with corporate formation, structuring, governance and commercial contracting ‎‎matters. ‎

Kathleen Swan

Kathleen Swan focuses her practice on venture capital, venture debt, private equity, and ‎‎institutional private placements representing both portfolio companies and investors and lenders. ‎‎Kathleen has represented clients within a number of diverse industries including energy, health ‎‎care, retail, pharmaceuticals, manufacturing, and utilities operations. She has worked with angel ‎‎investment and impact investment groups in connection with their formation and investment ‎‎activities. Kathleen is active in the venture capital and private equity communities and serves as ‎‎a judge, coach and mentor for several incubators, forums and business plan competitions.‎

Ian Adams

Ian Adams serves as Managing Director at Clean Energy Trust where he leads efforts to identify new innovations and investment opportunities while working to develop new initiatives to support early-stage innovation. Ian also supports Clean Energy Trust’s portfolio of cleantech companies by serving as a board observer for five companies. Ian previously served as an aide to the U.S. Secretary of Energy and worked at the White House.

Paul Seidler

Paul Seidler serves as Managing Director at Clean Energy Trust overseeing the organization’s investment activities, including deal sourcing, diligence, negotiations, and tracking and supporting portfolio companies. He has participated in over 30 transactions totaling over $5 million since joining Clean Energy Trust in 2014. Paul serves as a board director or observer for numerous portfolio companies. He is also responsible for managing structured fundraising initiatives on behalf of portfolio companies seeking to raise institutional capital.

Clean Energy Trust is a Chicago-based nonprofit that supports early-stage startups in the Mid-Continent region of the United States working on solutions for clean energy, decarbonization, and environmental sustainability. Clean Energy Trust helps high potential entrepreneurs scale and succeed by providing capital and hands-on mentorship and programming. To date, Clean Energy Trust has invested in 35 portfolio companies. Learn more at

Locke Lord LLP disclaims all liability whatsoever in relation to any materials or information ‎‎provided. This article is provided solely for educational and informational purposes. It is not ‎‎intended to constitute legal advice or to create an attorney-client relationship. If you wish to ‎‎secure legal advice specific to your enterprise and circumstances in connection with any of the ‎‎topics addressed, we encourage you to engage counsel of your choice.‎