Maximize the probability of a successful fundraise by developing a thoughtful strategy.
Fundraising is obviously an extremely pivotal event for a young company. As a friend once remarked, for a song and a dance, you get a huge infusion of capital, which in turn can be used to put the company on a completely different trajectory. Few events carry as much weight.
And yet, as an advisor, one of my biggest surprises and frustrations is that in many cases founders are not thoughtful about how to approach fundraising nor how it fits into a broader company strategy.
Instead, many founders tend to be entirely reactive or opportunistic. Those are certainly essential traits to have in startupland. And you can certainly get lucky with the next investor you happen to cross paths with.
But luck is no substitute for strategy. You don’t want to leave something as important as fundraising to chance. That is why I urge all founders to maximize the probability of a successful fundraise by developing a thoughtful strategy.
In the following sections, I summarize common pitfalls of not having a strategy and offer a definition for the purpose of venture capital fundraising. I also elaborate on what makes a company a good fit for VC as well as spell out a number of tactical considerations that can help time your fundraise well.