Preparation is the first phase of fundraising. It is designed to set you up for success in the next phase, which is the actual fundraise, where you initiate conversations with investors with the goal of eventually signing a term sheet.
In my experience, preparation is simultaneously the most important as well as the most underestimated part of a successful fundraise. Far more often than not, entrepreneurs don’t take the time to prepare effective fundraising materials or build out a qualified investor list or even network systematically to warm up, grow, and excite their network. Instead, much of this work is either not done at all or worked on while starting investor conversations. This tends to prolong fundraising if not kill it outright by slowing momentum while confusing entrepreneurs and investors alike.
As an outsider, this dynamic is ironic. As a fundraising advisor, it is very frustrating. However, to a disciplined entrepreneur - such as yourself, having made it thus far in the Fundraising Lore - this can be a huge advantage. Among a sea of mediocrity, simply investing properly in preparation will increase your chances of raising a round significantly.
While in this stage, I recommend spending about 3 months working on a total of 5 priorities, which I explain in greater detail in the following chapters.