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This guide describes all the steps, processes, and scope of Soliciting.



1. Solicitation campaign 


This means a series of solicitations made by the same person and are similar in content or based on a similar pitch, or sales approach, which series leads up to or is represented to lead up to an event or lasts or is intended to last for a definite time. Suppose the sequence of solicitations lasts or is designed to last for an indefinite time or more than one year. A "solicitation campaign" means all similar solicitations made by the same person occurring within a particular calendar year.


2. Financial model and data room walk-throughs


When a company was sold years ago, the enterprise acquiring it would ask to see financial and historical company documents as part of the due diligence process. These documents would be stored in a safe room that was continually monitored.


Individuals crucial to the decision-making would visit the chamber to review the documentation. These spaces have moved to the digital realm and are now called investor data rooms.


A data room is one of the hallmarks of a well-organized company, and you may be able to benefit immeasurably from having a highly structured way to tell your startup's story with data.


A virtual data room can be a crucial component of your startup's fundraising efforts and provides backers with all the information to decide whether to invest.


2.1. Why does a startup need an investor data room?


2.1.1. Helps with due diligence


A virtual data room contains all the documentation that showcases your startup’s strengths and performance. It presents an accurate and compelling picture of your enterprise, helping investors complete their due diligence.


There are many moving parts to the due diligence process. So, the better and more organized your virtual data room is, the quicker and less painful the process will be. Staying organized means you won't lose mission-critical documents such as essential customer contracts.


2.1.2. Speeds up the fundraising process  


An investor data room can help speed up the fundraising process. When you're trying to raise venture capital for your startup, investors will want to see all historical documentation to help them make an informed investment decision. 


However, not everybody agrees on this. Some investors say that data rooms slow down the investment process and cost founders significant amounts of time spent better growing their startups.


2.1.3. Makes investors’ jobs easier

In recent years, venture capital funding has proceeded at a furious pace, which doesn't leave investors much time to investigate deals. You can make their job easier with an investor data room.


Think about setting up a data room before raising money if you're considering a funding round. Having a data room ready to go before you have even a single fundraising discussion can save you countless headaches for both you and your backers. 


Startups don’t have the history that their mature counterparts do, which means investors may spend more time scrutinizing early-stage companies. Data rooms have all the information they need to be organized in a single location, making it easy to access critical information.


2.1.4. Keeps you organized and focused


Putting together a data room puts you into a fundraising mindset because it forces you to see things through an investor’s eyes. This process will help you document parts of your business that previously only existed in your head, such as product development and customer acquisition plans. Doing both these things can help to bring clarity to your efforts.


2.2. When should I put a data room together?

It’s never too early to put a data room together. A forward-thinking founder will already be planning from the first day their startup is operational. Even as early as the seed money stage, a highly organized data room can go a long way toward impressing potential investors. 


2.3. How to set up an investor data room


A data room is merely an extension of your existing file structure. If you’re already organized, setting one up should be relatively quick and easy. When setting up a data room, two of the best file hosting services are Google Drive and Dropbox.


Create a folder structure that’s clean and easy to navigate. Because investors' time is valuable, you will likely want to ensure that your system is intuitive and straightforward. Only allow read-only rights so that third parties don’t download or edit your sensitive data. You may want to create separate data room access for each investor to provide targeted information for each one–this can help make the process more personal. 


Establish a content update schedule and stick to it. You’ll be ready when an investment opportunity appears, and you won’t have to scramble at the last minute.

2.4. Why you might need two data rooms

It might be good to set up two different investor data rooms. That way, you can segment document accessibility based on need. You can access the first room for investors who have expressed interest in funding your startup but haven't made a firm commitment yet.


This room will usually contain strategy documents, pitch decks, and product plans. The second room will have more sensitive information such as legal agreements and HR documents for more serious investors.

To make it easier to locate a specific document, create an index to show readers what files each data room contains. This can be a huge timesaver that will make you even more organized. 


2.5. What to include in your data room


It can be challenging to figure out what documents to include in your data rooms. If you include too little, investors won’t have the information. If you include too much, you may risk overwhelming them with data and waste their time trying to wade through it all.


2.6. Here’s what you might want to include


2.6.1. Company Documents


  • Amended and restated articles of incorporation

  • Voting agreements

  • Investor rights agreements

  • Partnership agreements

  • First refusal and co-sale agreements

  • Customer contracts

  • Board of directors' materials

  • Board meeting minutes

  • Board consents and actions

  • Shareholders’ agreement

  • Market research

  • Competitive analysis

  • Sales process

  • Marketing materials

  • One-page business plan

  • Pitch deck

  • Branding guidelines

  •  Office lease

  • Legal disputes (past and present)

  • Investor updates

2.6.2. Financials


  • Profit and loss statements

  • Pro-forma statements for next year

  • Financial projection

  • Asset register

  • Management accounts

  • Audited accounts

  • Capitalization table

  • Details of previous raises


2.6.3. Intellectual Property


  • Granted and filed patents

  • Trademarks

  • IP strategy

  • Software license details

  • List of any open-source software used

  • Domain name ownership


2.6.4. Employees


  • All employee contracts past and present (with titles and salaries)

  • All intern agreements past and present

  • All consultant contracts past and present

  • List of current employees, job titles, and salaries


2.6.5. Technology


  • System architecture diagram

  • API documentation

  • Details on any extensive integrations

  • Product backlog export and release map

  • Screenshots of existing products


Including past investor updates in your data room shows backers you’re willing to share the bad and the good. It’s an excellent way to tell them you take investor communication and transparency seriously, boosting your trustworthiness.


In the "employees" section, share the team's vision you're building. This allows an investor to hire team members from their networks. To give backers insight into your workplace culture and hiring process, including onboarding documents.


2.7. What you shouldn’t include


While certain information must be shared with investors, there are some things you should never share.


Always research the individuals you’re providing data room access to. Let's say you find out that they've given competitors substantial amounts of cash or are otherwise involved in the affairs of competing organizations. In that case, you might not want them to see sensitive company information.

Not every document needs to be included in your investor data room. Irrelevant documents can confuse the investor when you want to give them clarity. Some documents can be saved for the next stage of the deal after the investor has committed to moving forward.


The more documents included in your data room, the higher the risk of misusing or compromising information. Configure different views and access rights for the parties looking at your papers because not everyone needs to see everything. This will help keep your records secure.


2.8. Invest in your startup’s future with Hunt Club

One of the best ways to invest in your startup’s future is by ensuring your recruiting process is optimized. You’ll get the top-tier talent you need to grow your enterprise.

When you’re a founder trying to juggle a million things at once, it’s best to outsource your hiring needs to a network recruiter with a proven track record. Hunt Club is one such network recruiter.


3. Roadshows


3.1 What Is a Roadshow?


A roadshow is a series of presentations made in various locations leading up to a capitalization. The roadshow is a sales pitch or promotion made by the underwriting firm and a company's management team to potential investors before going public. Roadshows generally occur in major cities and are meant to drum up interest in the upcoming offer. Potential investors are introduced to the company, its history, and its key personnel.



  • A roadshow is a series of presentations made in various locations leading up to a capitalization.

  • The roadshow is a sales pitch to potential investors by the underwriting firm and a company's executive management team.

  • Chinese e-commerce giant Alibaba's roadshow contributed to the overwhelming enthusiasm surrounding the company's IPO.


3.2 Understanding Roadshows


When a company decides to raise capital, the investment firm members are responsible for underwriting or visiting investors worldwide in a roadshow to present the investment opportunity to potential investors. 


A successful roadshow is often critical to the success of capitalization. The goal of the roadshow is to generate excitement about the company and get capitalization. By traveling to different countries, underwriters introduce the investment proposal to institutional investors, analysts, fund managers, and hedge funds to interest them in capitalization. The roadshow also allows the underwriters to submit the company's management and for investors to hear the management's vision and goals for the company.


  • A video or digital media presentation

  • Meeting the executive management

  • The unique value proposition of the company

  • Earnings and financial performance

  • Prior sales growth with projections and forecasts

  • The investment opportunity and growth potential


The roadshow is essential to capitalization since it provides a forum where the company can communicate directly with potential investors to address any concerns or highlight successes. The underwriters also use information gathered from investors to complete the book-building process, which involves gathering prices potential investors are willing to pay for the investment.


Once a roadshow is complete, the final prospectus is created and distributed to potential investors, and this prospectus is also filed with auditors. 


3.3 Special Considerations


Not all roadshows involve capitalization. There are cases where companies travel across the country to talk to investors even when they aren't raising capital. These are called non-deal roadshows (NDRs). These roadshows occur when executives hold discussions with current and potential investors, but no equity or debt is offered. NDRs are carried out to provide the company information to investors, including updates on the company's existing business and vision for the future. NDRs involve meeting with key investors to keep them updated on how the company is performing.


3.4 Example of a Roadshow


Chinese e-commerce giant Alibaba Group (BABA) posted the largest IPO ever by raising $25 billion in 2014, while the underwriters involved took home $300 million. The IPO was so successful that it surged 38% in its debut. But enthusiasm for the IPO began well before the stock started trading. The roadshow included the company's financial numbers and video history narrated by co-founder and Chair Jack Ma.


The roadshow was such a success with investors that it's likely why the IPO price range was increased to $66 to $68 from the earlier published $60 to $66 content. Although the increase in the price range may not appear to be impressive, it's important to remember that the company sold over 300 million shares during its IPO.


4. Insurance Program Design


The importance of insurance and operational risk management solutions as crucial risk management tools for projects that need financing cannot be underestimated. However, no standard or perfect insurance policy can be applied to all projects.


There are essential factors that one must consider before starting the project to determine the ‘ideal’ insurance program. The steps often apply to various projects; they are general procedures that can be used for all insurance project sizes.


4.1 Insurance program in 5 steps


4.1.1. Step 1: Risk Assessment Practices and Risk Inventory


Many risk assessment practices can be applied in the construction industry presently. Some have proved to be more effective, and others have shown a low success rate. For a method to be successful and effective, it must meet the following requirements:


  • It should be inclusive of a broad spectrum of the project's stakeholders. The stakeholders include the design team, project owner, lenders, contractors, and subcontractors.

  • Developing a risk inventory: The preliminary plan coupled with the risk inventory will help determine and manage the highest priority risks. The risks would be deciding whether insuring, controlling, or transferring would be necessary.

  • We are updating the risk assessment and registering the risk during the critical milestones of the project in the bid to address any changes in the project against the built conditions.


4.1.2. Step 2:  Determining Risk Allocation and Ownership


After the risks have been identified and assessed, the next step is planning risk allocation. The risk allocation decision will be based on who is better placed to “own” individual risks. It is important to note that the planned risk ownership intent may vary depending on the commercial considerations. For instance:


  • Does the expected risk owner accept the risk at a reasonable cost?

  • Will the stakes be designed out as part of the final plan?

  • External factors such as suppliers of the equipment, lenders, etc.


Nonetheless, developing a reasonable risk ownership plan enables the insurance provider to establish contingency budgets, contracts, and insurance documents.


4.1.3. Step 3: Designing the Insurance Program, Feasibility Analysis, and Budget Creation


Before releasing the procurement requirements, it is essential to create an insurance program. The program should spell out the minimum coverage requirements that bidders can easily communicate. Also, the expertise of a qualified insurance professional should be sought while creating the design. The professional should adequately understand the market environment and, most specifically, the construction type under discussion. The project team must design an insurance plan that will cover all the identified risks during the risk assessment. Lastly, it should include all commercially available policies for the project participants.


One helpful tip would be considering alternative insurance such as:


  • Owner-controlled insurance programs

  • Contractor controlled insurance program

  • Project-specific insurance such as environmental or professional liability


However, the emphasis should be on specifying the needed coverage to protect the project. Most people tend to focus on the service provider, which will be determined later through negotiation and procurement.


It is the role of the project team to develop and estimate project costs for selected project designs, which will enable them to create an insurance cost estimate. The best time to conduct the insurance cost assessment would be after the maturation of the invention. It becomes easy to estimate labor costs, schedule, the cost of construction, and other rating factors. The estimation should include retained losses as a result of self-insurance or expected deductibles within the insurance program structure. The estimated insurance cost margin forms the baseline from which bid results can be compared.


4.1.4. Step 4: Contracts and Procurement


Most of the general conditions included in the procurement papers are not well researched. They are usually developed with an intended approach to identifying and allocating risks and a distinctive insurance design program. As a result, bidders may present a wide array of alternatives, and there may be no time to consider them resulting in incomplete information.


As long as the previous steps have been followed in a concise indemnity language, it becomes easy to develop the risk allocation tactic framework. The insurance requirements can be crafted carefully to match the desired coverage. As long as the proper steps are taken to price and design the policy, instructing bidders on the proposed alternatives compared against the budget estimates for the insurance becomes easy. It should offer a win-win situation for both parties.


4.1.5. Step 5: The Final Structure and Program Negotiation


Assuming the bids and alternatives are solicited, paying close attention to the proposals is essential. When reviewing the proposal for the insurance alternatives, always consider the cost as the priority item.


The CCIP and OCIP are practical alternatives for larger projects with an average risk management practice. Owners for single projects may not find OCIP superior, considering coverage, cost, and other factors.


If a contractor implements their projects, owners with multiple projects will be favored by OCIP as compared to CCIP for the first time.


For this reason, a flexible procurement process is encouraged as it gives room for innovative proposals that offer the best results. Lastly, the input of an experienced insurance professional in developing and evaluating insurance programs is paramount.

Whatever your insurance needs may be, work with the professional and dedicated team at Allied Insurance Brokers to help you mitigate risk on the worksite. With over 34 years in business, you can bet that our team has deep knowledge of the industries we work in, helping you develop an efficient & solutions-driven approach to mitigating risk and strengthening your business. Discover how our risk engineering services can help you embrace risk head-on and contact Allied Insurance today.


5. Insurance carrier vetting


The cost of insurance is often a critical factor driving subcontractor pricing. While alternative risk transfer schemes, such as consolidated insurance programs, have grown in popularity, the typical upstream/downstream structure where owners and general contractors contractually require downstream entities to procure insurance remains common.


Parties to upstream/downstream structured subcontracts often assume that carefully crafted insurance requirements on an executed contract ensure that the designed risk transfer scheme performs appropriately. However, this overlooks a critical step: vetting the insurance program requires both parties to collaborate to scrutinize the downstream insurance contracts to ensure compliance.


The need to vet downstream insurance is underscored by the reality that not all parties have the resources to ensure that their insurance programs comply with the insurance requirements in their contracts. Though far from a universal truth, smaller contractors often lack the internal time, dedicated staff, or experience to fully appreciate the complicated nuance of their insurance program or the full scope of their risk exposure. Smaller subcontractors who cannot afford an in-house risk management team or outsourced risk management services typically rely on their brokers to procure the coverage they demand in their contracts.


However, smaller unsophisticated brokerage firms or agencies are not always attuned to evolutions in the coverage landscape, ranging from identifying coverage issues latent in specific endorsements to creating new legal precedent impacting policy language construction. Meanwhile, insurers often introduce a slew of exclusionary endorsements into a subcontractor's program, irrespective of the subcontractor's risk profile or awareness, making it incumbent on the subcontractor to identify problematic endorsements and negotiate their removal.


For example, a contract with a roofing subcontractor on a residential project will typically require the subcontractor to procure general commercial liability (CGL) insurance covering liability arising out of its work and add a host of entities, including the owner and general contractor (GC), as additional insureds on a primary and noncontributory basis. If the GC were to obtain and review the subcontractor's full CGL policy, it would not be unusual to find the following troublesome endorsements.


  • Additional insured endorsements with privity language limiting coverage to the entity in direct contractual privity with the subcontractor, which is typically the construction manager or GC and not the owner or other upstream parties listed in the contract

  • Height exclusions precluding coverage for liability arising out of work above three stories

  • Exclusions precluding coverage for liability arising out of residential projects


5.1 Ensuring Compliance


An unanticipated work scope can also contribute to complying with insurance requirements. Although subcontractors might engage in various work capacities for a variety of projects, their insurance programs may not be revisited midyear or on a project-to-project basis to ensure compliance with individual contracts. Though not without cost, the most obvious solution is usually the best: to review the subcontractor's insurance and, when problematic or insufficient endorsements are encountered or the absence of necessary approvals realized, work with the subcontractor to rectify the coverage deficiencies and obtain proof of same.

While it may seem like the onus to ensure compliance with contractual insurance requirements should fall on the subcontractor, in practical terms, this is a challenge to be borne by all parties because failure to procure the required insurance can create costly problems for upstream parties.


When the intended risk transfer fails (i.e., a GC or owner is unable to obtain additional insured coverage in the face of a third-party liability claim), upstream parties are then saddled with the cost of defending and indemnifying the third-party claim, in addition to the cost of bringing a lawsuit against the subcontractor for breach of contract, all of which add delay and cost to the project. This problem is exacerbated further depending on the jurisdiction the GC or owner is in. For example, if operating in New York, the state's labor laws paired with the phenomenon of high jury verdicts make subcontractor insurance paramount.

Having established that a signed contract with broad insurance provisions is not enough to ensure risk transfer, the question arises of how to practically implement a subcontractor insurance vetting process that will not create exorbitant costs and delays for projects. For owners and GCs hiring dozens of subcontractors, it is undoubtedly a challenge to collect and review subcontractors' insurance policies and effectively monitor the correction of coverage deficiencies. Nonetheless, as with all costs associated with risk management, the savings realized in transferring risk downstream will outweigh the costs associated with administering a subcontractor insurance vetting program. The focus should be on what program format is most suitable given the size and sophistication of the upstream entity needing the vetting process.


The ideal, if not always practical, vetting process would entail collecting complete copies of all subcontractors' liability policies a couple of months before they begin work on the project, reviewing each for compliance with the contractual insurance provisions, and keeping the subcontractors off-site until each respective review is completed and any deficiencies corrected. Depending on the size of the project, this setup may require devoting a full-time employee to administering the insurance vetting project or contracting this process out to a broker, risk management consultant, or coverage counsel.


5.2 Challenges to Comprehensive Vetting


The time and effort that underlie a comprehensive insurance vetting process should not be underestimated. Obtaining complete copies of liability policies can prove challenging, as incorrect or incomplete documents are often mistakenly sent—certificates of insurance and policy declarations are helpful but not a substitute for a complete policy. While reviewing the policies can generally be fixed, the time invested in the next step of addressing detected coverage deficiencies will vary depending on (1) the sophistication and resources of the subcontractor and broker representative and (2) the flexibility of the insurer furnishing coverage. Even though the requested insurance coverage is available in the market, procurement efficacy can be tied to a subcontractor's bargaining power and the insurer's risk assessment.


Given the reasonable time and cost constraints inherent in insurance vetting, owners and GCs may consider only administering this process in connection with contracts above a specific dollar value. For example, suppose a signage subcontractor only provides $3,000 of work for the project. It may not be cost-effective to vet its insurance policies or expect it to dispense additional premiums to remedy coverage deficiencies. Additionally, the risk associated with a subcontractor's scope of work may be another factor in considering whether to subject that subcontractor to the insurance vetting process. A subcontractor installing signage less than two stories off the ground is likely less concerning than a roofing subcontractor. The resources associated with vetting the former subcontractor may be better allocated.


Admittedly, collecting whole policies from subcontractors can be document-intensive. At a bare minimum, the vetting process should require the submission of (1) policy declarations and schedules of forms for all liability policies, (2) copies of additional insured endorsements and primary and noncontributory endorsements for the primary CGL policy, and (3) complete copies of excess policies, which are typically manuscript but significantly shorter than primary policies.


The declarations confirm the named insured, policy limits, the policy period, and the policy number. At the same time, the schedule of forms enables the identification of any problematic endorsements (e.g., titles such as "Residential Exclusion" or "Limitation of Coverage for Designated Work"), which can be requested on an as-needed basis for review.

The additional insured and primary and noncontributory endorsements are arguably the most critical endorsements to review. They set the foundation for the owner or GC to obtain coverage under the subcontractor's policy and protect their insurance programs. Getting whole excess policies is typically the only way to confirm the requested scope. They are often manuscripts, and a schedule of forms will not reveal limitations in the different coverage firms.


Most critical to the success of any insurance vetting program is for the administrator to be proactive and diligent in obtaining policy documents and ensuring coverage deficiencies are being actively remedied. This may require weekly calls with subcontractors or their broker representatives and, potentially, direct calls with underwriters and the implementation of mechanisms for ensuring compliance, such as withholding payment or postponing start dates pending verification of compliance.


For less-sophisticated subcontractors and brokers, part of the process will involve educating the parties on the coverage issues. Ultimately, the vetting process should improve the performance of the subcontractor's insurance, which has a vested interest in ensuring its insurance program responds to the insurance requirements it has contracted to procure. When collaborating with subcontractors to address insurance deficiencies, it is helpful for all parties to appreciate that proposed coverage remedies are not merely a short-term benefit to upstream parties but rather help guarantee subcontractors get the insurance they purchased and mitigate against the need for breach of contract disputes with upstream parties. Engaging in this type of exhaustive review also helps the downstream entity in the long term, as many common modifications will improve risk transfer for other projects.


5.3. Conclusion


A thorough and efficient subcontractor insurance vetting program can help realize intended risk transfer and, with proper planning, be performed with minimal to no impact on the project schedule. Moreover, awareness of the scope of subcontractor coverage before a claim arises makes insurance procurement more transparent, allowing parties to demand sufficient coverage and proactively address potential deficiencies. In time, the implementation of vetting programs can inform the standard quality of subcontractor insurance programs, keeping insurers from attempting to issue illusory or inadequate coverage. Doing so benefits all contracting parties to significant construction projects.

Financial model and data room
Lower Section
Solicitation campaign
Insurance program design
Insurance carrier vetting
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