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: $100K -$250K. Majority deals are $100K-$150K
- Round Size: $500K - $1.5M (some exception to more then $2M)
- Valuation: $5M-$8M (some exception for higher than $8M with high level of traction)
- Deal Structure: Prefered a Priced Round, Convertible Note. (No SAFE, Please)
- Traction & Progress: MVP completed and ready to commence sales in next 6 months or sooner
- Sectors: Anything tech based must be doing real engineering in-house
- Head Counts: At least 1 full time founder
- Exit potential: We are looking for capital efficient business models that can produce a garter than-$100M exit to the investors
- Geography: Primarily, Michigan, MidWest and North America with some in Israel, Australia, Western 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 $8M. (This is a hard limit. Our soft limit is $6M.)
- Previous outside investment greater than $1.5M total.
- Deal is being done on a SAFE Note or a KISS. - This is a deal breaker!
- 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.
- 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 Eastern Europe, Russia, Middle East (except Israel), Africa, India,
- China, Southeast Asia, -- 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.
What are we looking for?
We have created a set of industry verticals and market sectors that we are committed to focus on to maximize our resources, we have created primary and secondary sectors of choice.
The Primary Sectors:
- Med-Tech - Technology applications that are designed for pre- & post-procedural interactions. Applications that improve the patients' experience and reduce the cost of the health system while increasing revenue. Medical Devices
- B2B / B2B2C / B2C - SaaS/ AIaaS - Business to Business scalable applications that are built on a SaaS (Software as a Service) platform for fast and easy adoption.
- Wearable Tech - Specifically, technologies that are intended for commercial use by law enforcement, military personnel, and safety / high-risk construction and maintenance crews.
- Agricultural & Food -Tech - Agricultural & Food Tech companies and technologies that introduce a new and innovative way to supplement and convert out of date farming technology that increase yields, quality, and health of everyday produce while dramatically reducing traditional operating costs.
- Intelligent Commerce & Digital Media - Companies that introduces new technologies for online interactive commerce that make mobile online shopping highly engaging and interactive
The Secondary Sectors:
- Automotive Tech / Industry 4.0 - Scalable financial technology that aims to compete with traditional financial methods in delivery, process, and transaction, especially in the application of Machine Learning and Artificial Intelligence and their role in the future financial market.
- Fin-Tech - Scalable financial technology that aims to compete with traditional financial methods in delivery, process, and transaction, especially in the application of Machine Learning and Artificial Intelligence and their role in the future financial market.
- Smart Data Analytics & AI Platforms - Introducing new and innovative ways to collect organize and visualizing data for better decision making process.
- Blockchain - Deep Tech - Focusing on Blockchain applications in the decentralizing infrastructure space, streamlining a business process that is in a higher-level need of visibility and verification applications.
- Technology In Motion - TIM Software and Hardware that is designed to be used on mobile devices that can be integrated with business systems that are in constant motion.
Although we have selected the following prefered industries and market sectors, we are agnostic. We will look at other scalable tech on a case by case basis.
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 $4M to $6M valuation.
** Valuation scales with MRR according to the factors described above.
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 have created a (3) three step application process that is designed to save time while creating a high degree of efficiency and velocity.
- Step No.01 - Qualification & Initial Selection ( 7-10 days)
The company will be required to complete phase one of the application that is designed to provide our team with the basic information about the opportunity and the deal structure. After submitting, our team will process your application though our qualification matrix based on our investment strategy parameters.
- Step No.02 - Phase one Due Diligence (10-35 days)
After passing our qualification matrix, you will receive an email indicating our intention to move to step 2, at this point you will be required to pay a one time application fee in the amount of $180. Upon completing your payment you will be sent an instruction for step 2 of the application which will require you to upload additional information. After submitting, our team will review the information and send you instructions for step 3, which will be the final step in the process.
- Step No.03 - Due Diligence Summary Report & Final Decision (35-45 days)
After completing step 3 and submitting, our team will finalize the due diligence and generate the due diligence summary report and notify the investors. After the final decision is made you may be invited to showcase your company in our next Investors showcase alongside 3-5 other companies.
Follow Up- After the showcase presentation, we will schedule up to two follow up zoom sessions with the interested investors. At the end we will issue a capital call and close the deal.
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:
- 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.
Although our closing ratio is higher than usual, you might go through the entire application process, and our team will put in the work, CitySide Venture does not provide any guarantees, warrants or any promises of any kind that your startup will be funded.
By applying I acknowledge that I will allow CitySide 60-Days from my first pitch to close. If your company is intending to close or have a mandate that the round should or need to be closed in less than 60-day, please do not apply.
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
We are looking forward reviewing to your application and to give you a “YES” asap.