Thank you for reaching out. In order for us to review the opportunity, you will need to complete the online application on our Venture Management System. Please do use Sidepitch. Please review the following guidelines and instructions before applying:
- Response Time: Usually within no more than 72 hours
- Check Size: $50K -$200K. Majority deals are $100K-$150K
- Round Size: $500K - $1.5M (some exception to more then $2M)
- Valuation: $2M-$5M (some exception for higher than $5M with high level of traction)
- Deal Structure: Prefered a Priced Round, Convertible Note. (No SAFE Not)
- Traction & Progress: Market Ready, preferred $5K-$30K monthly in gross revenue
- Sectors: Anything tech based must be doing real engineering in-house
- Head Counts: At least 2 full time founders one on tech and one on business
- Exit potential: We are looking for capital efficient business models that can produce a sub-$120M exit to the investors
- Geography: Primarily, Michigan, MidWest and North America with some in Israel, Australia, Wester Europe, those deals require to meet higher benchmarks than others.
We will not change our basic parameters of our investment model. Any of the following conditions will trigger an automatic "No" from us.
- Coin/token offering or SAFT or any Cryptocurrencies.
- Round size greater than $2.5M. (This is a hard limit. Our soft limit is $1.5K.)
- Valuation/CAP greater than $6M. (This is a hard limit. Our soft limit is $5M.)
- Previous outside investment greater than $1M total.
- Deal is being done on a SAFE Note.
- Primary offering is at the idea, mockup, prototype stage.
- No full time founders -- Even if they plan to become full time after funding.
(This is a hard limit. Even a single FT founder is usually a "No".)
- Company is not doing any real engineering of its own.
- Product/service is pure e-commerce sales, an esports league, or an esports team.
- Produce/service is related to legal "gray areas" like marijuana and real money gambling, only legely, morally and ethically business..
Company is based in Central Europe, Eastern Europe, Russia, Middle East (except Israel), Africa, India,
- China, Southeast Asia, or South America -- Even if the corporate entity is domiciled in the US. Even if the company intends to move its operations to a jurisdiction where we do invest.
We know precisely what we're looking for and try to be completely transparent. To save you time, we'll simply tell you how we make decisions.
80%+ of our decision process is based on just five variables:
The first step in our process is classifying your business model based on the target market and revenue model. We use the following target market categories:
- Founders & Team
- Business model.
- Unit economics and growth path.
- Capital efficiency. & Traction
- Large Enterprise.
- B2B, high price point.
- B2B, low price point.
- B2C, including B2B2C.
The higher a target market is on the list, the less convincing we need about the scalability, acquisition and delivery economics.
We use the following revenue model categories:
- Subscription, taking into consideration acquisition costs and churn rate.
- Two-sided marketplaces, taking into account acquisition and transaction metrics.
- High recurring transactional, taking into account repeat purchasing metrics.
- Low recurring transactional.
- Affiliate and advertising.
The higher a model is on this list, the lower the traction we need to see for a given valuation. As a rough guide, low recurring transactional revenue is worth about half as much as subscription (at a low churn).
- After the business model, we look at traction. Traction almost always means revenues and firm contracts starting within 60 days. (We don't count LOIs or verbal commitments.) Actually, we focus on gross profit to account for businesses with different margins. There are some exceptions. A large enterprise model with many unpaid pilots at potential lighthouse customers may warrant an exception. Similarly, a B2C model that is pre-monetization but has enormous DAY with high engagement is an opportunity we will often investigate further.
- We next consider this traction in the context of unit economics and growth path.
- Our database of our portfolio companies and thousands more applications mean we know the typical unit economics and growth trajectories of companies at this stage across our business model categories. If your metrics on these dimensions are higher, we need to see less gross profit. If they're lower, we need to see more.
- The final consideration before valuation is capital efficiency. Our model places a high premium on companies that consume less capital. These companies can do more with less and therefore have a better chance of surviving and achieving a sustainably growing business.
- We judge capital efficiency in terms of how much money you've previously taken from investors, your historical cash burn, and your projected cash burn. Beyond a modest level of capital intensity, we're usually not willing to invest at all. Below that threshold, the lower your capital requirements, the less traction we need to see.
At the end of our analysis, we combine all these factors into a valuation.
We make 90% of our investments at a $2M to $5M valuation in companies with MRRs of $5K to $30K.
** Valuation scales with MRR according to the factors described above.
Base on what you read above, you think your company is meeting our requirements, please follow our application process Guidelines:
MAKE SURE IT IS PUBLISH, OTHERWISE, WE WILL NOT SEE IT!
- Please complete the online application in its entirety. We have built the process with a particular purpose in mind so we will be able to provide you with a timely response.
- When you work on your online application make sure you SAVE your work before you log out, so you will not lose the information.
- When your profile is complete please do not forget to SUBMIT your application for review.
- You will be prompted to pay the $180 application fee. (No exceptions)
- After payment is complete, you will be prompt to PUBLISH your profile
- Upon receiving your successful payment, you will be prompted to log back to your account and PUBLISH your application. It is critical that your application will be PUBLISHED, otherwise, we will not be able to view it.
- Our timeline starts after your application was PUBLISHED!
- Upon receiving your application our Deal Flow Team will approve your profile in which time you will receive an email with instructions on next steps and/or any requests for more information.
- Our Deal Flow Team will review and make a decision on moving forward or not within 14 days.
- If we choose to move forward you will receive an email with a due diligence request, upon your approval, we will start the process.
- Our team will then schedule the first online or in-person meeting with you and your team.
- You will be invited for your initial pitch within 10 days after application was PUBLISHED!
- Must be market-ready or already in the market
- CitySide will charge a syndication fee that will be charged to the startup at the time of any BA funding.
Just to ensure fast turnaround, the Executive Summaries and Power Points should have the following elements in them, for review, to be selected for an in-person presentation by company representatives:
Include in your application:
- Problem being addressed
- Market need, size, and your solution
- Product or Service explained
- Competition Analysis
- Sales and Marketing Strategy
- Intellectual Property (what is protected and how)
- Management team
- What is the “ASK” & Terms - plus use of proceeds
- Deal Structure - Priced Round / CN etc..
- Exit strategy and valuations
- Financial overview and assumptions (see example below)
- Revenue Projections ($000) YR 1 - YR 2 - YR 3 - YR 4 - YR 5
- Full Cap Table with names and total invested
- Make sure you do not include SAFE or CN on can table add it in current debt
- Draft Term Sheet
- Drift Subscription agreement
- IP Documents
City Side provides solutions to find and manage investments for investors and corporate ventures using today’s technology. With the development of Sidepitch our online Venture Management System (VMS), we have automated the process of investments from start to finish.
Application Submitted online!
- 00 – 14 DAYS – Application Review
- 14 – 25 DAYS – Initial Selection
- 25 – 35 DAYS – Due Diligence
- 35 – 45 DAYS – Final Decision
- 45 – 60 DAYS – Deal Closure
We are committed to our process Pitch-To-Funding in 60-Days or less. Now that you are clear, please continue with the online application below
Yes, we know. We are asking a lot of information. The one critical thing we have learned, the more prepared the startup will be coming to table, the faster we will make our decision. Investment decision is all about time and capital, we need your partnership to ensure we will act quickly.
Our Power Tips:
We are looking forward reviewing to your application and to give you a “YES” asap.
- Complete your application with velocity. It will take 1-2 hours to complete in order to save a month of work.
- Make it a complete application, do not skip anything
- The more information you provide the the less we will need to ask
- Use the application to learn what you need to work on
- Practice your pitch prior to our scheduled investor showcase
- Last by not least, know your numbers backward and forwards. The one thing investors are sensitive to is a Founder or a CEO that does know his/her numbers.